New Delhi-based SMSdaak India Ltd, which operates digital payments startup instantPay, has raised between $3 million and $5 million (Rs 20 crore to Rs 34 crore) in pre-series A funding from Singapore-based RB Investments and Kaleden Holdings.
The capital will be utilised for geographic expansion and development of new products, a report in The Economic Times said. The company will also use part of the funds for marketing and brand building.
"While we build this massive network, we are also enabling other products and services to be delivered via this distribution directly and efficiently," Sankalp Shangari, co-founder, instantPay told ET.
E-mail queries sent to the company seeking further details about the funding round did not elicit an immediate response at the time of filing this report.
instantPay has over 100 products and services including electronic mobile recharges, utility bill payments, insurance premium payments, travel bookings and domestic remittance, among others.
The startup also facilitates digital payments at kirana stores in tier-II and tier-III cities. The company distributes its products and services through over 400 corporate strategic alliances and network of micro merchants.
It currently has over 62,000 merchants on board and plans to reach 1,20,000 merchants by March 2017. The startup claims to process around 10 million transactions per month and expects to increase the numbers by a five-fold by FY18.
"Companies should target to make unit economics sustainable before taking long bets in the market and aggressively aiming for market share," Rajesh Bothra, managing director at RB Investments told ET.
RB Investments is a boutique venture fund that participates in early-stage and seed rounds as well as Series A, B and C investments and later bridge rounds. Besides instantPay, it has invested in food ordering startups Swiggy, Faasos and Delight Foods in India. It has also invested in several other Indian startups including Capricoast, TrendyBharat and Ziffi.
Several fintech companies have managed to gain investor attention in the past few months.
Few weeks ago, fintech startup SERV'D, which provides financial services for the unorganised workforce, raised $100,000 (Rs 67 lakh) from Digital Financial Service Lab (DFS Lab), a fintech incubator fully-backed by the Bill and Melinda Gates Foundation.
Earlier in December, Bengaluru-based online investment advisory startup WealthApp Financial Advisors Pvt Ltd secured Rs 3 crore ($440,000) from angel investors including NuVentures managing partner Venk Krishnan, Daksh eServices co-founder MJ Aravind and others.
In November, payments firm ToneTag raised funding from T V Mohandas Pai, Manipal Global Education chairman; Anand Chandrasekaran, Snapdeal's ex-chief product officer and others.
In one of the largest deals in the fintech space, online payments company PayU, owned by South African Internet conglomerate Naspers, agreed to buy Mumbai-based rival Citrus Pay for $130 million (Rs 865 crore).