Financial services company FINO PayTech Ltd has invested an undisclosed amount in Mumbai-based fintech startup CityCash.
As part of the deal, the two firms have decided to co-create a payment solution, wherein CityCash will offer its NFC-based (near field communication) cashless payments technology and micro-payment merchant acquisition tool while FINO will act as the issuance and settlement institution of the prepaid payment instrument, FINO Paytech said in a statement.
Owned and operated by Tap Smart Data Information Services Private Limited, CityCash was founded in 2017 by Vineet Toshniwal, former managing director at Equirus Capital.
The partnership is also working on creating an NFC-based tap and pay solution on the lines of the Oyster and Octopus cards of London and Hong Kong, respectively, where customers can use a co-branded card to make payments at retail outlets apart from paying for autos and cabs.
FINO Paytech said it is in advanced stages of implementing its payment solution with some state and city bus corporations.
Founded in 2006, FINO is a financial inclusion software solutions and services company. It runs the FINO Payments Bank.
In January last year, the company had raised Rs 400 crore in primary funding from ICICI Prudential Life Insurance and general insurer ICICI Lombard. ICICI Prudential Life Insurance and ICICI Lombard had infused Rs 100 crore ($14.62 million) and Rs 18 crore ($2.63 million), respectively, for a 10% stake, and Rs 31 crore ($4.53 million) came from two institutional investors.
In its first tranche, the company had closed a Rs 251-crore ($37.6 million) funding from state-run refiner Bharat Petroleum Corp. Ltd (BPCL) for a 21% stake, in July 2016.
According to a report by The Economic Times earlier this year, Japanese telecom and Internet conglomerate SoftBank Group, Singapore state investor Temasek Holdings and Morgan Stanley Private Equity Asia were in separate talks to pick a 33.33% stake in Fino PayTech at an enterprise valuation of Rs 2,000 crore.