Payments and online banking solutions company Cashfree Payments said on November 30 that it has made a $15 million investment in Telr, a Dubai-based payment service provider.
The investment makes Cashfree the largest shareholder in Telr and will help the company strengthen its presence in the Middle East and North Africa (MENA) region as the company sets out on a course to expand its presence in global markets.
In an interview with Moneycontrol, Akash Sinha, co-founder of Cashfree Payments said that what prompted this investment was the large and growing market opportunity that the MENA region offers with only two percent of retail sales happening online currently.
“The landscape for online transactions is changing fast after the pandemic. Plus, Telr already has a partnership with over eight banks. So, it made sense to join hands with Telr to try and become the top payment service provider in the MENA region in the coming years,” Sinha said.
Founded in 2015 by IIIT Hyderabad alumnus Sinha and IIT Kharagpur graduate Reeju Datta, Cashfree Payments processes transactions worth $20 billion annually in India. With over 1,00,000 merchants on its platform, the company’s offerings include payment gateway, a split payment solution for marketplaces, bank account verification Application Programming Interface (API) and Auto Collect which enables merchants to collect payments from customers via various payment modes.
In the payment gateway space, the Bengaluru-based company competes with players like PayU, Paytm, Razorpay among others.
With Telr, the company will launch its products in the MENA region and will also develop a unified cross-border payments platform to help Indian merchants accept payments from customers in the MENA region and vice-versa. Currently Cashfree products are already used in the UAE, besides USA and Canada.
“Usually geographical expansion for a company like ours will mean reworking our payments partners in the new markets. Our intention with this partnership is to integrate the cash flow here in India and make a seamless transition globally through the partnership. This saves us a lot of time and energy,” Sinha added.
Telr handles payments in over 120 currencies and 30 languages and enables payments through Visa, Mastercard, American Express, UnionPay, Apple Pay, PayPal, SADAD, Mada and STCPay.
Financial services play
Cashfree has also launched products for Banking As A Service (BaaS), i.e. it is providing an integrated interface that can serve as a common platform for upcoming neobanks to provide banking products from its partners to customers.
Telr’s offerings, too, cover financial and business services including social commerce, QR Codes, digital invoicing, Telr Buy Now Pay Later (BNPL), a merchant financing platform named Telr Finance and Telr Shops, a tool for creating an online store.
“Cashfree too has a couple of lending products for merchants who use our payment solutions. We are working on a product which will allow merchants to take short-term loans from us which can be repaid within one to two months,” Sinha explained.
Funding plans
Cashfree Payments was incubated by California-headquartered online payments leader PayPal and is backed by Silicon Valley investor Y Combinator, Apis Partners and India’s largest public sector bank State Bank of India (SBI).
SBI made the investment in June this year with reports pegging Cashfree’s post-money valuation during the investment at $200 million.
“We are well-capitalised now. But we continue to be in active discussions for further funding. We will seek more funds at the right time,” Sinha said.
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