Early-stage VC firm 3one4 Capital secures profitable exit from ToneTag
3one4 Capital made its first investment in ToneTag in 2017 and said it has secured high returns on its investment.
Early-stage venture capital firm 3one4 Capital secured a profitable exit from its investment in Bengaluru-headquartered deeptech startup ToneTag.
ToneTage provides soundwave-based technology to enable digital payments. 3one4 Capital said the startup has generated a high return on the invested capital since its involvement in the pre-series A funding round in 2017.
A statement from the VC firm said, “Our conviction in ToneTag’s transformative potential, combined with deep operational involvement, has now translated into a full secondary exit at the same valuation as its $78M Series B2 primary round, delivering exceptional returns.”
3one4 Capital Managing Partners: Pranav Pai (left) and Siddarth Pai
The other investors in this deeptech startup include Amazon, Mastercard, Reliance Capital, Iron Pillar, and others. ToneTag's latest funding round was in February this year, when it raised Rs 674 crore in a mix of primary and secondary capital infusion.
Founded in 2013 by Kumar Abhishek and Vivek Singh, ToneTag has clients such as Google, Amazon, Airtel, ICICI Bank, SBI, Yes Bank etc. According to the statement, it has 65% EBITDA with 30% profitability and processed total payment volume (TPV) of $32 billion in FY25. ToneTag is projected to exceed $54 billion in TPV due to expanding network scale and increased enterprise adoption.
The technology platform of ToneTag enables payments through sound waves, allowing financial services companies to offer such services without the need for any extensive hardware investments.
In addition to its core payments technology, ToneTag also provides an inventory management system for merchants and collaborates with the National Payments Corporation of India (NPCI) to power UPI 123Pay, a payment solution designed for feature phones.
ToneTag enables 30 million daily interactions through 1.5 million soundboxes. It has collaboration for car payment solutions in three lakh vehicles. ToneTag has filed for 32 patents with 132 patent claims and has been granted 22 patents.
“This exit marks not just a strong return on investment for 3one4 Capital Fund II, but a milestone that validates the scale of ToneTag’s achievement and the strength of our long-term investment approach,” 3one4 said.
Edited by Kanishk Singh