Krafton Leads $53M Funding in Cashfree Payments

Cashfree Secures $53 Million Funding to Expand Global Reach

Cashfree, an Indian fintech company processing over $80 billion annually for its clientele, has successfully raised $53 million in a new funding round. This investment will be utilized to bolster its presence in select international markets.

Series C Funding Details

The Series C financing round was spearheaded by Krafton, the company behind popular gaming titles like PUBG and BGMI, with participation from existing investor Apis Growth Fund. This funding round values the 9-year-old startup at $700 million, having now raised close to $100 million in total.

Strategic Partnership Between Gaming and Payments

The collaboration between a gaming firm and a payments company is noteworthy. Executives from both organizations highlighted the strategic advantages of this partnership in a recent interview with TechCrunch.

Akash Sinha, co-founder and CEO of Cashfree, explained, “Krafton’s extensive reach within the digital content landscape, combined with the market opportunities for payment companies alongside e-commerce, travel, and financial services, presents a significant synergy.” He further noted the potential for streamlining payment processes for smaller transactions.

Benefits for Krafton and its Portfolio

Krafton views Cashfree as a dependable payment partner, not only for its own operations but also for the expanding network of startups within its portfolio. Many of these startups are anticipated to adopt Cashfree’s services in the future. Discussions are currently underway regarding integrating Cashfree for games like BGMI, with a partnership expected shortly.

Krafton’s Vision for Indian Fintech

Sean Hyunil Sohn, CEO of Krafton India, stated, “The fintech sector in India is experiencing substantial growth, and we are confident that Cashfree Payment’s leading position in India can be successfully replicated on a global scale.”

Cashfree’s Product Suite and Client Base

Cashfree serves a diverse customer base, including prominent companies like Swiggy, Zepto, and Bajaj Finance. The company offers a comprehensive suite of products, encompassing payment gateway services and automated payouts.

Innovative features such as PayToPhone, enabling mobile number-based transfers, and RiskShield, a fraud prevention system, further distinguish Cashfree’s offerings.

Expansion into the Middle East and North Africa (MENA)

Beyond its strong domestic presence, offering over 180 payment options and instant settlement, Cashfree is aggressively expanding into the Middle East. The company is specifically targeting six key markets: the UAE, Saudi Arabia, Egypt, Jordan, and Kuwait.

These countries are developing their own domestic payment systems, mirroring India’s UPI and RuPay networks. Sinha emphasized, “MENA represents a substantial market, and we aim to become a leader within it, focusing on these six major marketplaces.”

From Restaurant Deliveries to Payment Solutions

Cashfree’s origins were somewhat accidental. In 2015, Akash Sinha and Reeju Datta initially focused on facilitating cash collection for Bangalore restaurant delivery personnel. Their venture evolved when clients requested online payment capabilities, revealing a larger market opportunity.

Overcoming Early Challenges

Initial investor skepticism was overcome following acceptance into Y Combinator, despite missing application deadlines and a delayed start to the program.

Recent Developments and Technological Capabilities

Cashfree has recently obtained two additional licenses, including one for cross-border transactions, and has onboarded several international clients.

The company’s technology infrastructure can handle up to 12,000 transactions per second during peak periods. Furthermore, SecureID, Cashfree’s identity verification system, has processed over a billion verifications, aiding businesses in fraud prevention and improving customer onboarding.

Regulatory Approvals and Backing

Cashfree is among the first companies authorized by the Reserve Bank of India to function as a payment aggregator for both domestic and international transactions. Y Combinator and State Bank of India are also among its early investors.

Krafton’s Investment Strategy in India

This investment by Krafton is consistent with its broader strategy in India, where the company has already invested approximately $200 million in various startups.