Bengaluru-based Cashfree Payments India, which runs payouts service provider and payments gateway Cashfree, has raised $35.3 million (around Rs 260 crore) in a Series B funding round.
The round was led by financial services-focused Apis Growth Fund II, with participation from returning investors Y Combinator Continuity Fund and Korean venture capital firm Smilegate Investments, a statement said.
Cashfree, which was part of startup accelerator Y Combinator’s 2017 batch, has raised over $5.5 million across seed and Series A rounds from Y Combinator Continuity Fund and Smilegate Investments.
The fresh capital, the statement said, is expected to fund the company’s growth plans, which includes launching new products and making acquisitions for geographic expansion and product reach.
Founded in 2015 by former ecommerce executives Akash Sinha and Reeju Datta, Cashfree started out as a payments link generator for merchants. It subsequently added services such as online payments processing and bulk disbursal of payments, such as vendor and salary payouts, for its customers.
The company also provides instant settlement offering on its payments gateway and a UPI stack with ready-to-use integrations such as collections, disbursal and verification for its merchant partners.
“Over the years, we have built a strong presence among enterprises by innovating for experience, scale and security. We still see payments as an evolving industry with its own challenges and we would be investing in next-gen payments as well as banking tech to make payments processing easier and more reliable,” Akash Sinha, CEO of Cashfree, said.
The company currently works with more than 50,000 businesses, including internet companies such as Cred, BigBasket, Zomato, HDFC Ergo and Acko. As of March 2020, the company claims to have processed over $12 billion annualised payment volumes.
“As digital payments proliferate globally, the Indian market continues to represent one of the most exciting opportunities that we see in the world,” Udayan Goyal, managing partner of Apis, said.
“Cashfree has maintained a leadership position in this space and is now going through a period of rapid growth fuelled by the development of unique and innovative products that serve the needs of its customers,” he said.
Cashfree’s business overlaps with that of investor-backed players such as Razorpay, which turned a startup unicorn earlier this year, as well as Instamojo, which recently raised equity investment from Gunosy Capital and others.