Innoviti Raises Rs. 120 Crores (~US$ 18 Million) to Grow its Payments and Lending Businesses - Innoviti

Innoviti Raises Rs. 120 Crores (~US$ 18 Million) to Grow its Payments and Lending Businesses

12 July 2017

  • Current round of Series B funding led by the Singapore-based SBI FMO Emerging Asia Financial Sector Fund (the ‘SBI-FMO Fund’ jointly setup by SBI Holdings Group of Japan and FMO of Netherlands), Bessemer Venture Partners and existing investor Catamaran
  • US$ 5 Million was previously raised in Series A in June 2015. Funds were used for a) rearchitecting the flagship uniPAY payments platform in to a full-fledged enterprise grade product – uniPAY Next and b) extending the platform to offer lending solutions to small businesses under the brand smelending.com
  • The new uniPAY Next platform’s superior performance has driven rapid market acceptance with Innoviti today processing more than US$ 3 Billion in B2C transactions across 50,000+ POS terminals. Innoviti grew 100% in transaction processing volumes last year against the national average of 55%. Volume processed per terminal in Innoviti’s portfolio is 1.7X of India’s national average – a demonstration of the superior quality of the solution
  • Innoviti’s smelending.com small business lending platform processes more than 150,000+ loans from 30,000+ SMEs every year, with over $500 Million of loans disbursed till date
  • The current Series B funding will be used to a) continue the rapid market expansion for the uniPAY Next platform and b) expand the smelending.com product to target payment and lending to more businesses right across the supply chain.

Leading payments company, Innoviti Payment Solutions today announced financing of Rs. 120 Crores (~ USD 18 Million) to further its vision of digitally organizing the flow of money for businesses across the retail supply chain. The current round was led by the SBI-FMO Fund, Bessemer Venture Partners and existing investor Catamaran. Masterkey Holdings, Bangalore were the exclusive investment bankers to the deal.

(Logo: http://photos.prnewswire.com/prnh/20151009/10132317 )

Less than 10% of India’s retail payments are currently digital, creating a market opportunity of more than $500 Billion annually. Similarly, the shortfall in supply of funds to SMEs is estimated in excess of $300 Billion and is difficult to solve in the absence of technology-based solutions. Further, the Indian market requires a differentiated approach to product design given the communication infrastructure challenges and low levels of awareness about digital technologies. Innoviti has focused on an experience-centric approach to solving these problems through its uniPAY Next and smelending.com platforms. Deep technology has been used to build solutions that work within existing infrastructure constraints to deliver payment processing reliability of more than 96% vs. the industry average at 80%. Enhanced reliability builds confidence in digital payments with both the consumer and the merchant. Transaction processing time has been brought down to an average of 2 seconds (vs. industry averages at 7 seconds), thus delivering a superior experience to the customer.

Over the past twelve months Innoviti has also been extending the platform to provide lending solutions for small businesses. Branded as smelending.com, this platform extension provides a frictionless process for addressing the short-term working capital requirements of small businesses. Using technology to automate all aspects of the lending process, the platform enables loans as small as Rs. 30,000 (US$500) for periods as short as 15 days. Designed as an asset-light platform, smelending.com connects lenders to small businesses and processes more than 150,000 loans annually for over 30,000 such small businesses.

On the payment processing side, Innoviti has several recent firsts to its credit. These include a) the launch of faster contactless card acceptance for the first time in multiplexes, b) launch of UPI acceptance in offline retail through its UPI@POS solution in collaboration with NPCI, and c) launch of automated acquirer fallback feature to provide greater payment processing reliability to merchants struggling with store and bank network failures.

The current round of funding will be used to a) aggressively market the uniPAY Next experience to acquire customers looking for greater speed and reliability in their payment acceptance, b) rapid expansion of smelending.com platform to provide working capital loans to kirana stores and brand franchisees, and c) expand the product to address payment and lending issues beyond just retail to more businesses across the supply chain.

Innoviti’s payment platforms serve a marquee client base of merchants including Reliance Retail, Titan, Landmark Group, INOX, Indigo, Walmart and several others. Leading banks such as HDFC, ICICI, Axis, SBI, Standard Chartered, Kotak and Citibank use the platform to access customers for processing their payments and distributing to them loans.

“A rapidly growing Indian economy with fledgling infrastructure needs a different approach for the delivery of payment solutions. An approach that first focusses on making every transaction happen, and happen fast. Innoviti with its extensive experience and relationships in the payments space has embarked on the journey of delivering to this simple promise of speed and reliability in payments. The current funding from marquee investors is a huge endorsement of our approach and business plan. We believe that our platform is a game changer and are eager to utilize this round of funding to rapidly scale our presence,” said Mr. Rajeev Agrawal, CEO, Innoviti.

“Catamaran’s choice to partner with Innoviti because of the company’s innovative approach to credit distribution built on top of a robust payments platform continues to yield positive results. Over the years, Rajeev has proven that he is a great custodian of capital and has demonstrated perseverance, commitment, flexibility and drive through an important phase of his business. He is an entrepreneur with a solid reputation across the ecosystem and has leveraged his strengths to build confidence and traction across marquee customers and partners alike. With a strong foundation and a well-capitalized balance sheet, Innoviti is well poised to strengthen its market position in what continues to be a receptive ecosystem for well-designed digital payment and lending solutions,” said Mr. Abishek Laxminarayan, Director, Catamaran.

“We are excited to partner with Innoviti as we jointly build the leading digital payments platform in India. Innoviti is a company focused on developing unique solutions for the Indian payments context and we like companies with the ability to create IP. We believe these solutions will also be valuable to other countries in Asia and we will work with Innoviti to extend our network in this region to them. We also look forward to working with our co-investors Bessemer and Catamaran,” said Mr. Suramya Gupta, Fund Manager, the SBI-FMO Fund

“We like Innoviti’s vision of organizing the flow of money across the supply chain. It is large and very relevant to India as it is emerging now. We believe this vision, coupled with Innoviti’s superior technology, will drive them to leadership in the payment ecosystem,” said Mr. Vishal Gupta, Managing Director, Bessemer Venture Partners.

About Innoviti Payment Solutions Pvt. Ltd:

Innoviti Payment Solutions runs a payment platform that has a unique ability to add intelligence to traditional payment channels, enhancing their value. Merchants, brands and financial service providers use these intelligent payment channels to reduce cost and drive sales of their products. Innoviti processes over Rs. 40,000 Cr. of payment transactions, about 6% of all offline merchant payment transactions in India. This also includes Rs. 1.500 Cr. of transactions involving distribution of loans to consumers and small businesses. The most capital efficient company in this space, Innoviti processes more volume for every $ raised than any other payments company. The company is backed by marquee investors such as Catamaran Ventures, SBI Venture Capital and Bessemer Venture Partners.

For more information, please visit – http://www.innoviti.com

About Catamaran, Bangalore, India

Catamaran is an evergreen domestic investment firm with interests in VC/PE, joint venture partnerships and public market investing.

We invest in a few selected talented entrepreneurs and investors each year. Our portfolio spans FMCG, healthcare, manufacturing, financial services, education, medical devices, media and other sectors. We are active across stages: seed/angel, expansion, and public market investing. Across all our investments, we are a fundamental long-term oriented investor looking for teams with strong values addressing large opportunities in a differentiated and capital-efficient way. We have a preference for companies that are altering the fundamental fabric of life in India, or earning greater respect for our country overseas.

About the SBI-FMO Fund

The SBI-FMO Fund is a Private Equity fund based in Singapore which invests in FinTech and financial services companies across Emerging Asia. The Fund has been setup by two global institutions – The SBI Holdings Group (http://www.sbigroup.co.jp/english/), a leading Internet-based financial services conglomerate in Japan that was spun-out from SoftBank, and FMO (https://www.fmo.nl/), the Dutch development bank. The SBI Holdings Group is the leading FinTech conglomerate in Japan and one of the best performing Japanese Private Equity/Venture Capital Asset Managers with an AUM in excess of USD 5 Billion. FMO is one of the world’s largest Development Finance Institutions. The SBI-FMO Fund leverages the joint strengths of both its sponsors to help companies benefit from the Fund’s global networks.

About Bessemer Ventures

Bessemer Venture Partners (BVP) is a $4B venture capital firm that funds consumer, enterprise and healthcare startups around the world, from seed stage to growth. BVP funded the early stages of Blue Apron, Pinterest, Skype, Bigbasket, Swiggy, Motilal Oswal, Shriram City Union Finance, Home First Finance and Twitch and helped build 117 IPOs including Twilio, Yelp, LinkedIn, Shopify, MindBody and Wix. Follow us @BessemerVP.

Media Contact:

Sarath Chandra Nerella
Associate Vice President – Marketing Communications
sarath@innoviti.com
Innoviti Payment Solutions Pvt. Ltd.

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    Credit card EMI uses your credit card limit to convert your purchase into installments. Suppose you make a purchase for Rs. 9,000 on your credit card and while buying select the credit card EMI option with a tenure of 3 months, then the bank instantly converts your purchase to three installments of Rs. 3,000. In the next credit card cycle, instead of paying Rs. 9000, you will need to pay only Rs. 3,000, and continue paying this for 3 months. A nominal interest or processing fee may be charged depending upon the various schemes running at the merchant.

    If you don't own a credit card and would still prefer paying in instalments, you can use your Debit card to make select purchases on EMI.  Your debit card bank may have qualified you, you can check the bank on the same by sending the following SME message to your bank:

     

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    AXIS (Min value is 5 K)

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    While making the payment, notify the store executive to swipe your debit card transaction in the EMI mode and select a preferred tenure. The transaction will get approved on your bank as per your qualification and converted into EMI for the number of months selected during the transaction.

    Buy Now Pay Later (BNPL) is like using a credit card or getting a loan and repaying in EMI. The only difference being that it is for an ultra-short duration of 15 days to 60 days.

    Merchant will get the money the next working day from the bank.

    Interest costs depend from case to case. For example, in: Zero cost EMI - Customer doesn't pay the interest cost Bank EMI - Customer pays 12 to 15% interest cost depending upon the bank. Buy now pay later scheme (15 days) - Customer pays around 1.16% interest, again depending upon the banks. Buy now pay later (30 days,60 days and 90 days) - Customer pays 2.33%, again depending upon the banks.

    Processing fee is the amount charged by a credit/ debit card issuer to process your customers loan booking. For example, HDFC Bank charges Rs. 199 as processing fee for both CC and DC EMIs.

    IMEI validation is done by entering the IMEI number into the Innoviti terminal which then gets validated by the brand for an authentic product being sold.

    IMEI validation is done for Brand EMI transactions.

    The offers could be on any brand, product, bank card, being offered on any specific dates or any specific SKUs

    SKU promotions start with the cashier scanning SKU, IMEI/ Serial number from the billing POS and entering the amount in the billing POS and then transacting under the "Brand EMI" tender mode.

    As SKU comes directly from the billing POS via scan, it reduces the errors and manual effort of selection to re-enter/select again from the EDC.

    Joint promotions are offers provided to consumers in which two or more parties are bearing the cost of the offer. It is a highly efficient mechanism to reduce the cost of marketing. Small merchants can benefit by getting their name associated with large banks and brands.

    Innoviti has used payments technology in unconventional ways to bring merchants, banks, and brands together and enable them to run joint promotions for their common consumers.
    Innoviti’s uniPAY Next and GENIE products can run instant cashbacks, EMI, upgrade offers and others with two or more parties bearing the cost of it.

    The MDR, or Merchant Discount Rate, is a fee paid by the merchant to its bank for accepting payments card payments. This is typically calculated as a percentage of the transaction value undertaken through credit/ debit cards.

    Merchants can negotiate with banks for better MDR rates. With greater scale, merchants enjoy better negotiation power. You can also reduce MDR using Innoviti’s sophisticated multi-bank routing technology in uniPAY Next.

    Innoviti's uniPAYNEXT multi-bank routing technology automatically routes every card swipe to the bank that will charge the lowest MDR for it.

    Innoviti’s uniPAYNext technology uses an advanced #LookAhead technology to instantly scan the store and bank networks and identifies the best route from the store to the bank to improve transaction reliability. It optimizes speed, cost & reliability based on merchant pre-set rules to select the bank.

    Mismatches between a merchant's daily sales bank card settlements creates unnecessary manual reconciliation work. Innoviti's uniPAYNEXT technology digitally adds the approval code and approving bank name to the billing system enabling automatic reconciliation.

    The reports can be seen on SPARCS, uniPAYNEXT's reporting portal. This comprises of some very useful information like daily settlement receivables from each acquiring bank, store sales by different card issuers or regions or payment tender modes opening new possibilities for joint marketing programmes.

    UPI stands for Unified Payment Interface (UPI), a technology created by National Payments Corporation of India (NPCI). It allows transfer of money from one bank account to another instantly via one's mobile phone. Innoviti supports UPI payment via any UPI app such as Paytm, GPay, WhatsApp Pay, PhonePe through its terminals. To know more, click here.

    You need a Sodexo card issued by your employer. You can use your Sodexo card to pay for your food & grocery purchase on any Innoviti terminal in your F&G store. To know more, click here.

    Innoviti supports all Visa, Master, Rupay cards, UPI, Sodexo, other meal cards, EMI, Buy Now Pay Later Plans and loyalty point redemption through debit cards of banks supported by Loyalty Rewardz.

    How can I get my shop name added to Innoviti’s advertisements on Google?
    Once you sign-up with Innoviti and your GENIE app is installed, your name will automatically get added to the advertisements. It takes between 4 to 5 days for the name to start appearing.
    How can I get my shop name added to Innoviti’s advertisements in banks?
    Once you sign-up with Innoviti and your GENIE app is installed, your name will automatically get added to the advertisements. It takes between 4 to 5 days for the name to start appearing.
    How does GENIE coupon work? On which banks is it applicable?
    GENIE coupon is an instant discount offered by Innoviti to every consumer whose payment is done on Innoviti’s mobile app by the merchant. Customers need to enter their mobile number in the app, they will instantly receive an OTP through SMS/ WhatsApp, entry of this OTP applies the surprise instant discount on the purchase value immediately.
    Example: If your purchase value was Rs. 10,000, and the coupon value is Rs. 500, then your charge-slip will be approved for Rs. 9,500. You save instantly. The merchant gets the full money.
    It is applicable to credit/ debit card holders of 100+ banks in India.
    Does wallet work on refurbished products?
    Yes. GENIE’s EMI wallet can be used to provide zero-cost EMI on refurbished, second- hand and upgrade plans.
    How can I get access to customers qualified for credit by banks?
    Banks work with aggregators to provide access to these customers. Innoviti is a leading aggregator which can provide you with a terminal that will connect to the bank and provide you access to these cardholders.
    In addition, Innoviti in coordination with the bank will promote your store to all the bank’s customers who are pre-qualified.

    Brand EMIs are joint promotion schemes used by merchants, banks, and brands to incentivize a consumer to buy a higher end-product than what they can afford. The purchase is converted into EMI instantly by the bank, with the interest cost being borne by the product brand.

    Innoviti has partnered with 100+ brands including Apple, Samsung, Vivo, Oppo to extend 1000s of such schemes.

    You need to be pre-qualified by your credit, debit card bank to be eligible for Brand EMI. The bank will typically look at your credit card and savings account history to qualify you.

    Innoviti’s technology instantly checks with the bank if you are qualified to approve your Brand EMI transaction.

    Does wallet work on unbranded products?
    Yes. GENIE’s EMI wallet can be used to provide zero-cost EMI on any unbranded electronics product like headphones, power banks, speakers, etc.
    How does BEAM work?
    BEAM (Brand EMI Acceleration Mission) offer gives merchants the option to get sponsored by one of the leading mobile brands that they represent. Innoviti has tie-ups with brands like Samsung, Oppo, Vivo and Xiaomi. Using BEAM, merchants get 1% extra margins on the sponsored brands and 0.5% extra margins on the rest of the brands