Cashfree Payments raises $53 million in funding led by Krafton

Cashfree founders Reeju Datta and Akash Sinha

Payments solutions provider Cashfree Payments has raised $53 million (Rs 450 crore) in a Series C funding round led by South Korean digital entertainment company Krafton, with participation from existing investor Apis Partners.

The latest funding round, which was mostly a primary transaction, with a small secondary component, valued the company at around $700 million, people aware of the deal tell.

The deal establishes a strategic partnership between the Krafton, the company behind popular games like Battlegrounds Mobile India (BGMI) and Bullet Echo India, its portfolio firms in India, and the payment gateway provider for digital transactions.

Cashfree is not currently powering Krafton’s games or business, but the two may explore synergies or potential partnerships in the future.

"They (Krafton) have been active in India and have been investing in digital content and entertainment space. We recognise them as a major player with a deep understanding of digital consumption trends. As a payments company, we see this as a large opportunity," Akash Sinha, CEO and Co-Founder of Cashfree Payments said.

The fintech firm had raised funds back in June 2021 from State Bank of India (SBI) at a post-money valuation of $200 million, followed by a bridge funding round of Rs 130-150 crore from existing investors.

Market expansion, cross border payments

The round comes after a period of slowed growth for the company due to a temporary ban by the Reserve Bank of India (RBI) on onboarding new merchants, which had hindered its expansion over the past two years. The embargo was lifted in December 2023 and was crucial for the fintech firm which has been focusing on restoring its profitability and gaining market share.

The nine-year-old fintech firm has seen its merchant signups grow by 130 percent in FY25 and currently processes transactions worth $80 billion annually across 8 lakh businesses. With plans to scale its presence in the UAE and other markets in the Middle East, Cashfree is focusing on strengthening its offerings globally, drive product innovation and expand market reach.

Cashfree aims to cross Rs 1,000 crore revenue in FY25, projects 25% from non-payment products

Cashfree provides businesses with solutions for online payment collection, payouts, fraud detection, and identity verification.

Among its latest innovations, Cashfree has developed Secure ID, an identity verification suite that has processed over 1 billion verifications. The company also offers embedded payments, allowing platforms and SaaS businesses to integrate payments into their products. It is also one of the first entities to be authorised by the RBI as a payment aggregator for both domestic and cross-border transactions and has the approval to issue prepaid instruments. The company's new product lineup also includes RiskShield, a risk management solution for payment gateways, and Flow Wise, a payment orchestration platform.

Some of its notable clients include Swiggy, redBus, Zepto, bigbasket, and Bajaj Finance.

“This investment will help us accelerate our key efforts - across cross-border and security innovations and international expansion - as we enter the next phase of our growth journey. Growing sustainably has been core to our identity and how we function at Cashfree Payments. We are focused on driving profitable growth as we scale," said Sinha.

"Our mission is clear: to create long-term value for our customers and lead innovation in the payments space, both in India and internationally.”

Krafton India CEO Sean Hyunil Sohn said the company believes Cashfree Payments’ strong position in India can be replicated globally, while Apis Partners’ Co-Founders and Managing Partners Matteo Stefanel and Udayan Goyal noted that Cashfree Payments' track record reinforces its leadership in the sector.

"India's fintech industry is experiencing remarkable growth, and we believe Cashfree Payment's dominant position in India can be replicated globally. As the media and entertainment sector and content consumption patterns in India continue to evolve, full-stack payment systems that specifically address the needs and requirements of the sector are crucial for enhancing user experience. The investment is part of our ongoing efforts to support innovative solutions that drive growth and foster a dynamic startup ecosystem," Sean Hyunil Sohn, CEO, Krafton India said.