Bengaluru-based fintech member, Cashfree announced on Tuesday that it has raised $35 million or Rs 260 crore for an undisclosed minority stake via a funding round led by Apis Growth Fund II.
The funds will be used by Cashfree, a firm which offers payment collection and payout solutions to companies, as they will be deploying the money in payments infrastructure, new product lines and will also use it for expanding its services into other emerging markets, Carefree’s chief executive and co-founder Akash Sinha mentioned in a statement.
Half a decade old, Cashfree has been performing profitably well for the last three years, and has experienced a four-fold growth in its revenue to Rs 100 crore in the Fiscal Year 2019-2020, and expects to maintain a similar growth rate in the topline in the Fiscal Year 2020-2021 as well, Sinha added.
“Apart from Apis, which gets a board seat after getting a significant minority stake in the company, existing investor ‘Y Combinator’ also participated in the round,” Sinha said.
Sinha hinted at the fact that the funds raised for a minority stake will be sufficient for the company to support its organic growth plans for the next 18-24 months.
Sinha said, ” The company will also be interested in acquisitions going forward, adding that some preliminary talks are already underway.”
He further mentioned that the natural outcome received under the current initiatives will help in taking the company public since they will be coming out with an initial public offering in the long term.
Sinha said, “The pandemic, which has seen an increase in the adoption of digital payments, has accelerated the company’s business.”
In March 2020, the fintech player handled cash amounts similar to $12 billion on an annualized basis, he stated, adding that the quantum is evenly split between the payment collection and payout solutions.
On the lieu of payments, it helps the merchants collect payments, while on the front of the payouts, it offers a bulk disbursal option which allows the companies to send money instantly to the designated bank accounts for aspects like vendor payouts, wage payouts, e-commerce refunds, insurance claims processing, loan disbursements, expense reimbursements, loyalty, and rewards payments.
