[Funding alert] Y Combinator-backed Cashfree raises $5.5M from Smilegate Investments
Payments platform Cashfree has secured $5.5 million Series A funding, led by Korea's Smilegate Investments. Existing investor Y Combinator, and other notable investors including George Osborne, former Chancellor of the exchequer, United Kingdom, and Vellayan Subbiah, former MD of Cholamandalam Investment, also participated in the round.
Michael Seibel, CEO of Y Combinator said:
"Fintech is a really exciting opportunity in India right now. We are very impressed with Cashfree's strong growth, its focus on product innovation, and the kind of unaddressed problems they're going after."
Cashfree had previously raised $120,000 in 2017 in seed funding from Silicon Valley-based startup accelerator Y Combinator.
The Bengaluru-based payments and banking technology company will be using the freshly raised funds to expand its team and for the distribution of its API Banking platform - Payouts. Currently, the team size stands at 45.
"We want to distribute payouts to more businesses and build our banking solution, which lets businesses to connect all their bank accounts into one place," said Reeju Datta, Co-founder of Cashfree, to YourStory.
Cashfree was founded in 2015 as a payment gateway by former Amazon and BankBazaar employee Akash Sinha, and IIT Kharagpur graduate Reeju Datta. In mid-2016, the company built a dedicated bulk payouts solution for businesses operating in India. The API banking platform allows businesses send money round-the-clock and instantly to bank accounts, UPI, and cards by integrating them with its product.
Cashfree is currently used by 12,000 businesses for vendor payouts, wage payouts, build refunds, expense reimbursements, loyalty, and rewards. Some of its notable customers include Xiaomi, Tencent, Delhivery, Zomato, Cred, Club Factory, and ExxonMobil.
Akash said, “We have been growing 25 percent every month for the last 12 months. With the new round of funding, we will expand our product team and build for new use cases faster.”
Reeju told YourStory that the current annual run rate of the company is $4.5 billion.
Cashfree also offers a payment gateway to support instant refunds, a split payment solution for marketplaces, a bank account verification API and Auto Collect - a virtual account solution to match inbound payments to customers.
Akash added, “We are in an exciting phase of fintech in India. There are new companies coming up that require flexibility and control over how money moves. Our API banking platform and payouts enable this. It connects any organisation’s software product or ERP to the banking system for automated transactions. API banking is the future of business banking in India and we are at its forefront.”