Hyderabad-based payment and customer retention solution provider, Paynear, has raised $2.5 Mn in a pre-Series A funding round from serial investor Mitesh Majithia. Mitesh has joined the company as its board member.
This move is a part of the company’s bigger $10 Mn fundraising plans. According to Prabhu Ram, MD and Chief Strategy Officer of Paynear, the company looks to raise this amount from HNIs, VCs and institutions it has synergy with. He hopes to close this round by the first quarter of the next financial year.
Paynear enables individuals & businesses of all sizes to easily manage their payment needs. Its product mPay is a mobile point of sale (mPOS) solution that allows small merchants and even individuals to accept credit/debit card payment through their smartphones or PCs. The mPay portable card reader is coupled with the mMay app, both of which are available in seven regional languages so that even small-time business owners who are not fluent in English can operate this device and app.
Apart from just offering payment processing, Paynear also enables merchants to undertake and manage the other paraphernalia associated with payment solutions such as couponing and loyalty cards.
According to Prabhu, the idea behind Paynear was to enable the small retailers and merchants, who are still the backbone of the retail sector in India. These retailers simply engage in their daily transactions and once the transaction is done, they have absolutely no system in place to reach out to their key customers, engage them and earn their loyalty. Prabhu and the founding team – all of whom have over 10 years of experience in payment and merchant-centric industry – saw a gap here and decided to address it by founding Paynear in 2013. The team includes Anil Bharadwaj V, Maulik Shah and Priti Shah.
The company also offers customer retention and engagement solutions to small merchants like Kirana (Mom & Pop) stores, with its CRM solution. It helps them track sales, manage their products and run their business effectively. Merchants can view their daily, weekly, monthly sales reports with credit, debit & cash breakup. They can even access their customer details like total transactions by a customer, total value of transactions by a particular customer, customer email id and phone number, and purchased dates, using CRM and can download reports/transactions in multiple formats.
These services are available for a one-time installation amount of INR 1500 to 2500 and a monthly rental of INR 300 to 500. The company also recently launched its new solution called SPOT (Simple Payment On The Go), which allows small businesses like kirana/general store, internet cafe, pharmacies and grocery stores to earn additional income by offering services like recharging prepaid mobiles, DTH & data cards, paying insurance policies and utility bills such as electricity and gas. They can even book cabs, buses, trains and flight tickets with the SPOT app. With every transaction, the merchant gets to earn commission – starting from 2% to a maximum of 15%.
The company is also in the process of replicating the restaurant POS systems of top-notch restaurants and offering it as an app, in several regional languages, for small-time restaurants at an economical price of about INR 6000. It’s also targeting salons, parlors, coffee shops and standalone taxis.
Currently, Paynear has over 4500 devices in the market and is adding about 700 merchants as its clientele every month. Until this round, the company was bootstrapped and was fueled by $1.25 Mn pumped in by the founders. The Paynear founding team was also the founding team of EBS (E-Billing Solutions), which was acquired in 2011 by Ogone Payment Services – one of Europe’s leading payment service providers. With this exit, the team was also able to raise $1 Mn from friends and families, which helped the company to remain bootstrapped till this round.
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