India: Mswipe in talks to raise up to $40m

Mobile payments services provider Mswipe Technologies Pvt. Ltd has initiated talks to raise as much as $40 million (around Rs250 crore) in a new round of funding, two people aware of the development said.

The firm which provides merchants with mobile point of sale (PoS) terminals to enable digital transactions, has appointed investment bank Avendus Capital to help it raise funds, said one of the two people cited above, seeking anonymity as the talks are private.

“The firm recently mandated Avendus to run the fundraising process and has initiated conversations with investors for the same. It is looking raise $30-40 million in this new round. Funds will be used majorly to enrol larger number of merchants for its PoS devices,” he said.

The fundraising comes at a time when the number of cashless transactions in the country has increased after Prime Minister Narendra Modi announced the withdrawal of Rs500 and Rs1,000 notes on 8 November. These two currency notes formed the bulk of the currency bills in circulation in the country.

Credit and debit card transactions at PoS terminals saw a 106% year-on-year growth in December, according to Reserve Bank of India data.

“Demonetisation has been a shot in the arm for payments firms. Mswipe’s business was growing strongly before demonetization, but post November, the numbers have seen a sharp increase, which will make the company more attractive to investors,” said the second person cited above, also requesting anonymity.

Emails sent on Friday to Mswipe were not answered. A spokesperson for Avendus Capital declined to comment on the development.

The last fund-raising at Mswipe was in July 2015, when it raised Rs160 crore in a Series C round from new investors such as Falcon Edge Capital, Ola Cabs and Meru Capital. Existing investors Matrix Partners India, Axis Bank Ltd and DSG Consumer Partners also participated in the round.

Mswipe was founded in 2012 by Manish Patel, a doctor by education, who previously co-founded an alcoholic beverages distribution firm called Milestone Merchandise. Mswipe provides a mobile payment solution with a card reader, which can be attached to any mobile phone’s audio (headset) jack. The firm also provides similar card payment solutions for smartphones.

It works closely with smaller banks such as Corporation Bank, RBL Bank Ltd, Shamrao Vithal Co-operative Bank Ltd and large banks such as Axis Bank Ltd.

It is also present in West Asia, the US and South-East Asia through partnerships. Its clients include small and medium enterprises.

In the payments services market, Mswipe competes with companies such as Ezetap and Paynear.

In August 2015, Ezetap raised Rs150 crore from Social+Capital, Helion Advisors and Berggruen Holdings, Horizons Ventures and the Capricorn Investment Group.

In December 2015, Paynear raised Rs16 crore from a high net-worth individual investor.

The latest round of funding could additionally see existing investor Axis Bank Ltd make an exit from the company.

On 15 November, Mint reported that the private sector lender was exploring the sale of its entire stake of approximately 8% in Mswipe. Axis Bank first invested in the company in early 2013.

Also Read: India: Axis Bank in talks to sell its 8% stake in payments firm Mswipe

State rivals force India’s e-payment firms to step up their game

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.