The State Bank of India, the largest public bank in India, has invested into the payments platform Cashfree at a valuation of $200 million, the company announced.
This is the next round of investment received by the company after it had managed to raise $35 million last year from growth stage investors including Apis Capital. The company is mainly focussed on processing payments and also makes payouts. It also provides payouts, refunds and other services.
We are excited about our partnership with the country’s trusted and leading lender SBI. The investment underscores Cashfree’s role towards building a payments ecosystem that enables fast and easy ways to collect payments and make payouts for growing businesses. The investment fits perfectly with our growth strategy as we continue to focus on customer experience and product innovation,” said Akash Sinha, co-founder and chief executive officer, Cashfree.
More than the actual investment, the company would be delighted with the fact that such a large public sector bank has pumped in funds which should give it a lot of confidence. Since the investor is a public bank, it also means that the company is likely to be highly regulated and licensed in what it does and this is likely to increase interest among major investors. Large investors always prefer startups and companies that are well regulated as this would minimise risk of failure which is one of the most important parameters for them.
India has been moving towards digital payments rapidly over the last few years especially spurred on by government policies and the pandemic has just made the adoption even faster. The continued pandemic has led to more lockdowns and with people unable to move out of their homes, they have had to reply on digital payments for everything. This has led to huge upsurge in the payments industry in India and we have been seeing interest in this space from Google, Amazon and other major companies.
This is going to be a very tight and hard fought race for the market and though the available market is very large, the number of players in this field has also been increasing almost on a monthly basis. Unless the payment processors begin to show some variety by way of features, upgrades and offers, it might be difficult for newcomers to crack this market in the long run.