Innoviti Payment Solutions Pvt. Ltd has raised Rs 35.6 crore ($5 million) in debt funding from FMO, the Dutch development bank said in a disclosure.
FMO said in a disclosure that the Bengaluru-based firm's payments solution is designed for small businesses in line with the bank’s strategy of catalysing economic growth and bridging the digital divide.
With around 63.4 million units throughout the country, MSMEs or micro, small and medium enterprises account for around 31% of the economy as well as 33.4% of India's manufacturing output, the bank observed.
Innoviti was founded in 2002 by Rajeev Agrawal, who holds a B.Tech degree and PhD from IIT-Bombay. Before coming to be an entrepreneur, he had worked with technology firm Sasken Communications in Bengaluru.
Innoviti’s payments business, launched in 2008, helps merchants receive payments across channels, including online, mobile, in-store and at the time of delivery of a product. Through smelending.com, the company helps businesses get short-term loans of Rs 30,000 for 15 days or more.
Innoviti claims to process over Rs 20,000 crore of payment transactions annually including Rs 1,000 crore of credit across 50,000 point-of-sale terminals every year. Smelending.com has processed more than 150,000 loans annually for over 30,000 small businesses. It has so far disbursed $500 million loans.
Innoviti’s client base of merchants includes Reliance Retail, Titan, Landmark Group, INOX, Indigo and Walmart. Lenders such as HDFC Bank, ICICI Bank, Axis Bank, State Bank of India, Standard Chartered, Kotak Mahindra Bank and Citibank use the platform to process their customers’ payments and distribute loans.
Innoviti had raised Rs 80 crore in its previous round led by venture debt firm Trifecta Capital in March last year.
Prior to that, it secured $18 million in July 2017 in a Series B round from SBI-FMO Fund, Bessemer Venture Partners LP and existing investor Catamaran Ventures.
Peers
Innoviti competes with the likes of Pine Labs, BharatPe and Mswipe in the digital payments space in India.
Pine Labs Pvt. Ltd last month raised funding from Mastercard Inc., marking the second reported bet the global technology payments giant has made on an Indian firm within six months.
New York-based hedge fund Coatue Management is also reported to be leading a round of funding up to $100 million in BharatPe, which services offline retailers and businesses, at a valuation of $500 million. It also counts Ribbit Capital, Insight Partners and Steadview Capital among its backers.
Mumbai-based mobile point-of-sale services startup Mswipe Technologies Pvt. Ltd had raised $31.5 million from tech investment firm Epiq Capital and venture capital firm B Capital, managed by Facebook co-founder Eduardo Saverin early last year.
FMO’s India investments
The Dutch development bank finances projects through equity and debt instruments in sectors such as agri-business, food and water, energy and financial institutions in underserved regions. Along with Washington-headquartered International Finance Corporation, it is one of the most active global investment institutions in India.
In November last year, it invested about $30.27 million in CreditAccess Grameen Ltd, which operates a microlending business under the Grameen Koota brand name. At the end of October, it proposed a $40 million debt investment in non-banking finance company Ess Kay Fincorp Ltd.
In the same month, it proposed a 7.50 million euro ($8.29 million) investment in Sahyadri Farmers Producer Co. Ltd. FMO said the proposed investment will help Sahyadri finance the construction of collection centres for the warehousing and transport of produce.
Its other bets include a debt investment of $30 million in Kolkata-based Srei Equipment Finance Ltd, and Nomisma Mobile Solutions Pvt. Ltd, which owns digital payments and loans platform Ftcash.