Payments-tech firm Go raises funding from Infibeam
Infibeam Avenues Ltd, the operator of India’s only listed e-commerce firm Infibeam and the parent of payment gateway company CCAvenue, has invested in Mumbai-based digital payments tech firm Go Payments.
In a stock-exchange filing, Infibeam said that it had acquired 14,400 equity shares as part of the deal, putting the transaction value at Rs 6 crore (around $850,000). The filing also showed that Go Payments' paid-up share capital comprised 15,000 equity shares of Rs 10 each.
In a separate press note, the Ahmedabad-based firm said that the investment will help the company develop its payment technology platform for offline merchants and retailer transactions in Tier II and III cities.
Instant Global Paytech Pvt. Ltd (IGPL), which operates Go Payments, will also use the money to acquire customers and merchants, as well as to strengthen its team.
“An estimated 90% of the transactions in the country are still cash-based and there are over 700 million people who fall into the category of those who have access to cash and digital instruments but are not comfortable transacting in the digital world,” said the note.
Go Payments was founded in April this year by Vivek Patel (operations chief) and Daykin Creado (chief executive). Patel studied management at Warwick Business School and law from the University of Mumbai. Creado is a microbiology graduate who was the tech chief of Mumbai-based payments solutions firm ItzCash, which was part of media baron Subhash Chandra’s Essel Group and was later acquired by US-based Ebix last year.
Go Payments offers payment technology for offline transactions, enabling merchants and retailers to offer digital solutions to cash-transacting customers. The company’s digital financial services are used for direct money transfer, bill payments, mobile recharge, travel bookings, and more.
This is not Infibeam’s first bet on a digital payments platform. In February last year, it had agreed to acquire payment gateway firm CCAvenue.
Infibeam, which started off primarily as an e-commerce firm, has pivoted its business model subsequently. Its core e-commerce solution BuildaBazaar and payment solutions business CCAvenue together account for nearly 98% of the company’s revenues since 2017-18, while its e-commerce site accounts for the rest two per cent.
Last month, the firm witnessed a top-level exit as Jason Kothari quit as the president of Infibeam Avenues Ltd, barely four months after taking charge.
Infibeam's share price also plunged recently, falling more than 70% amid WhatsApp rumours on 28 September 2018.
For the second quarter of 2018-19, the company posted a significant rise in operating revenues, thanks to the growth of its web services business.
Operating revenues rose to Rs 134.82 crore for the quarter ended September 2018, an 83% increase over Rs 73.74 crore for the same period a year earlier.
Total expenses nearly doubled to Rs 137.46 crore during the period, with payment gateway processing charges accounting for nearly 80% of the costs.
Net loss stood at Rs 4.5 crore for the second quarter of 2018-19. The company had reported a net profit of Rs 1.05 crore for the year-ago period.