Citrus Payment looking at international expansion starting with Japan; mobile to be key focus going forward: CEO Jitendra Gupta

Mumbai-based online payments company Citrus Payment Solutions Pvt Ltd, that has raised Rs 35 crore ($5.74 million) in funding from two Japanese payments companies econtext Asia and Beenos Asia, with participation from existing investor Sequoia Capital, is now eyeing international expansion.

Citrus, which aims to close this financial year (FY14) with 7x revenues over the last year's figure, will start with Japan and then expand to other markets in the region. In an exclusive chat with, Citrus' co-founder and CEO Jitendra Gupta talks about the Indian market, business opportunities, future plans and more.

Why did you rope in two companies from Japan as your strategic investors? What value addition will these companies bring to the board?

econtext and Beenos are very strong in their respective areas. econtext is Japan's largest payments company while Netprice, the parent of Beenos Asia, was a famous market play. Now, Netprice has become an investor in various marketplaces across the world. It has investments in Indian online marketplace ShopClues and Indonesia's largest marketplace Tokopedia, etc. We will gain a lot of expertise from these companies in terms of market payment play and marketplaces. From this perspective, it is a good situation for us. Additionally, we have always had the aspiration to become a regional brand in the Asian region, and this funding will help us achieve that mission.

As you know, eBay's PayPal failed to get into the Asian market because of regulatory hurdles. So there is definitely an opportunity for us to become a strong consumer brand in the region.

Did you approach these companies for investments? Why didn't you go to a VC investor to raise money?

Beenos and econtext approached us a year ago. Initially, we were not sure about whether these companies could be the right partners for us. We did our diligence and so did they. We finally decided to take the money as we felt we can complement each other. Additionally, they can add a lot of value to our business. VC investment is mainly about money, not the business. We were not looking just for money, but for the opportunity opening up with this deal. If it was just for money, we would have got it from Sequoia.

Where will you invest the funds?

We will use the money for expansion and also to improve our mobile offerings. Since our investors are from Japan, our first target market is Japan. These firms have a large presence in five-six markets here and so it will be easy for us to establish in those markets. Getting the product to Japanese standards and localisation will take six-seven months and another six-seven months to roll it out. Firstly, we will look to launch Citrus Checkout and depending on the market requirements, we will launch other products as well.

You mentioned that PayPal could not make any headway in Asia because of regulatory issues. How will you address these issues?

PayPal didn't get approval to operate from any Asian countries which are highly regulated and more importantly relationship-oriented markets. PayPal made an attempt in India, too, but it didn't get the nod. Now, the best it can provide is the credit and debit offerings which do not add much value. So, I don't see any threat in the near future, because our market needs localised offerings and flexibility as per the merchant's requirements.

I worked for a bank for eight years and I used to deal with regulators regularly. Dealing with the government is an art and we do it effectively at Citrus as well. We adopt a very cautious approach when it comes to brining innovations to our product. We take legal opinions, basis of which we move to the government. In simple words, we take an informed approach rather than an aggressive one.

You offer multiple solutions, including net banking, cards, EMI, enterprise payment SaaS solutions. What is your USP?

Citrus Checkout is our flagship product and no other company in India is offering a similar product. Citrus Checkout is where a consumer can store credit/debit and personal details and he/she can use it across all merchants' sites through a checkout login. If you look at MakeMyTrip, Cleartrip, Flipkart or Indiatimes Shopping, they all try to create individual walls and so the consumer needs to create individual account or wall for each merchant. We felt that there should be one convenient account which can be used across all merchant's sites. Hence Citrus Checkout.

What innovations can be brought into the payment segment?

People are moving from web to mobile. In the web, there are enough players and offerings. However, in the mobile space, not much is happening. So, any innovations from Citrus will be around mobile. Going forward, mobile will be our key focus.

How many merchants do you add every month?

This year, we will be growing seven times in comparison to last year. We have already grown the revenues five times so far. We are adding around 125-130 merchants every month. We have already crossed the 1,000-mark.

The online payments space in India has seen a lot of action, including Hitachi's acquisition of Prizm Payment and Boku's purchase of Qubecell.

Are you also looking at an exit?

I am very bullish about this market and I don't think about exit in five-seven years. In India, the population is 1.3 billion, of whom 700 million use mobile phones. Over 100 million among them are smartphone users. This market can go only one way and that's up; so why would any company even think about exit right now?

What are the trends that you have been watching?

A lot of government agencies are now going online and that is contributing to our growth. We are seeing a good traction in terms of mobile-based transaction which used to be 1.5 per cent. Now, it is almost 12 per cent of the total transaction, which is very healthy and also aligned with our strategy.

(Edited by Joby Puthuparampil Johnson)

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