Payments startup Cashfree eyes fresh funding

So far, the company has raised close $45 million in funding in three rounds from investors including Y Combinator, Smilegate Investors, Apis Investment and State Bank of India (SBI).

Last year, State Bank of India (SBI) also invested an undisclosed amount in the fintech company.   
The company has recorded 48% growth in net profit to Rs 25.22 crore for the financial year ended in March 2021, posting profits in four consecutive fiscals.

Online payments gateway service provider Cashfree Payments is looking to raise funds from investors after a gap of two years, co-founder Akash Sinha told FE in an interaction.

So far, the company has raised close $45 million in funding in three rounds from investors including Y Combinator, Smilegate Investors, Apis Investment and State Bank of India (SBI).

The Mumbai-based company was valued at $200 million in its last round, which took place two year ago. With a yearly growth rate of 100% in its topline, the startup was valued at around 4x times its revenue at the time of its previous funding. The company posted revenues of `230 crore in FY21 and has been growing at 100% on a year-on-year basis, Sinha said. The company has recorded 48% growth in net profit to Rs 25.22 crore for the financial year ended in March 2021, posting profits in four consecutive fiscals.

Founded in 2015, Cashfree Payments had raised its maiden seed funding of $120,000 in 2017 from US-based accelerator Y Combinator. In 2019, the startup raised $5.5 million in a Series A round from overseas investor Smilegate Investors along with some angel investors. In 2020, Apis Partners, along with some of the existing stakeholders, invested $35 million in a Series B round, according to Crunchbase data. Last year, State Bank of India (SBI) also invested an undisclosed amount in the fintech company.

The startup provides integrated payment gateways to merchants for online payments processing. The startup handles payment gateways of around 1 lakh merchants. Some of its merchants witness around 10 lakh transactions on a daily basis. The startup has built an integrated platform to process transactions on the customer end, merchant end and for the third party on a single platform, Sinha said. Cashfree has around 60% market share in payment disbursals in India. Private sector lenders HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, along with PSU lender SBI, have partnered with the startup.

“The success/conversion rate that our merchants get from us is higher than they get from other players. We have integrated with some of the major banks in the backend. We are able to provide very high uptime. The platform is able to provide that kind of reliability. If you have to process a very large number of transactions, Cashfree is a reliable platform,” Sinha said.

On the company’s new launches, Sinha said the firm on Wednesday launched a platform which will allow interoperability in card tokenisation. Merchants will be able to use tokens issued by the company on other payment gateway platforms. This week, the Reserve Bank of India (RBI) extended the implementation of tokenisation system till September 30. Through this new mode of payments system, the card details of the consumers will not be stored on merchant platforms but a token will be issued in its place to protect data privacy.

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