3one4 Capital clocks 'high-multiple' exit from ToneTag after 8-year investment

3one4 Capital clocks high-multiple exit from ToneTag at $78 million valuation

3one4 Capital has exited its investment in ToneTag, the soundwave-based digital payments firm, delivering a high multiple return from its Fund II portfolio.

The venture capital firm sold its stake in a full secondary transaction at the same $78 million valuation as ToneTag’s latest Series B2 round. While 3one4 described the exit as a “high multiple” on invested capital, it did not disclose the exact return multiple. The exit concludes an eight-year journey for 3one4, which led ToneTag’s pre-Series A round in 2017.

Bengaluru-based ToneTag, founded by Kumar Abhishek and Vivek Singh, enables proximity payments using soundwaves, bypassing the need for NFC or QR infrastructure. The company claims to have onboarded over 800,000 merchants and processes more than $32 billion in annual transaction value through over 1 million installed IoT nodes. It projects FY26 total payment volume (TPV) of over $54 billion.

ToneTag’s platform operates through its Contextual Unified Secure Platform (CUSP), which supports UPI, central bank digital currencies (CBDCs), and tokenised cards. The company is also powering NPCI’s UPI 123Pay system for feature phones.

Its enterprise clients include Google, Amazon, Airtel, ICICI Bank, SBI and Yes Bank. ToneTag’s smart IoT nodes are deployed across fuel stations, retail outlets, and QSR chains, and support advanced features such as voice-led payments, proximity detection, and real-time insights.

ToneTag recently launched a “pay-by-car” solution in partnership with MG Hector and Bharat Petroleum, allowing users to pay at fuel stations via in-car infotainment systems using UPI.

According to 3one4, ToneTag has achieved around 65 percent EBITDA margins and 30 percent PAT, positioning itself as a profitable and scalable infrastructure player in the fast-evolving digital payments landscape.

The fund’s exit from ToneTag marks one of its most successful outcomes from Fund II.

This comes months after 3one4 Capital announced that it had registered a Multiple on Invested Capital (MOIC) of 58X over seven years on its investment in HR tech SaaS firm Darwinbox, where it still continues to hold on to shares, Moneycontrol reported earlier.

This was part of the recent $140-million round that Darwinbox raised from Partners Group and KKR.

Apart from Darwinbox, 3one4 Capital has also tasted success by betting on Tracxn (IPO exit), Licious (existing shareholder, unicorn), Pocket Aces (sold to Saregama), Wiom (sold shares in secondary transactions), DoSelect (acquired by Naukri.com), Wigzo (acquired by Shiprocket), Aereo (sold shares in secondary transactions), Jigsaw (acquired), Oust (acquired), and Loco (acquired), among others.