Bengaluru-based payment gateway startup Cashfree has raised ₹38.5 crores ($5.5 million) in series A round from South Korea-based venture capital firm Smilegate Investments. Y Combinator which already backs the startup also participated in the funding round. Angel investors George Osborne and Vellayan Subbiah also invested in the startup.
Founded by Akash Sinha and Reeju Datta in 2015, the startup runs four products including easy to integrate payment gateway supporting instant refunds, a split payment solution for marketplaces, a bank account verification API and a virtual account solution to match inbound payment to customers called Auto Collect.
The Y Combinator-backed startup will use the freshly raised capital to expand its team of 45 to 100 and distribute its API Banking platform payouts. As per current metrics, more than 12,000 businesses use Cashfree for vendor payouts, bulk refunds, expense reimbursements, wage payout as well as managing loyalty & rewards.
Cashfree claims to process around ₹31,500 crores ($4.5 billion) at an annualized run rate which is growing 25 per cent, MoM. One of the X factors of the startup is that using its Payouts API, one can transfer money even on bank holidays using modes like direct payment to a debit card, wallets and UPI.
The four-year-old startup competes with well-funded players like PayU Money, Infibeam, Citrus, Razorpay, Instamojo and Infibeam. Cashfree, however, counts some prominent names like Xiaomi, Zomato, Dunzo, Cred, Tencent, Club Factory, Ketto, Milaap, ExxonMobil and more as its clients.