Stripe Invests in Clear India: $75 Million Funding Round

Stripe Increases Investment in Indian Fintech Sector

Stripe has recently made a second investment within India, following the announcement of its initial investment just days prior. The globally recognized startup has provided backing to Bangalore-based SaaS fintech company Clear, as jointly announced on Sunday evening.

Clear Secures Series C Funding

Formerly known as ClearTax, the 10-year-old Indian startup has secured $75 million in its Series C funding round. Kora Capital spearheaded the investment.

Participants in this round included Stripe, alongside Alua Capital, Think Investments, and a number of pre-existing investors. This brings the startup’s total funding to over $140 million.

According to sources, the new funding round has valued the Indian startup at over $700 million.

Clear’s Services and User Base

Clear, which previously received investment from Y Combinator, Sequoia Capital India, Founders Fund, and Elevation Capital, facilitates tax filing for both individuals and businesses.

The company also offers wealth management guidance to individuals, and provides businesses with solutions for e-invoicing and credit access.

Currently, over 6 million individuals utilize the platform, alongside more than 1 million small and medium-sized businesses, and over 30,000 enterprises.

Growth and Market Position

Archit Gupta, founder and CEO of Clear, stated in an interview with TechCrunch that the startup’s SaaS platform has experienced fivefold growth in the past 18 months.

Clear now processes over 10% of India’s business invoices, an increase from 3% in 2016, with a Gross Merchandise Value (GMV) of $400 billion.

Expansion and Future Plans

ClearTax, the flagship offering from Clear, emerged during a period when electronic tax filing was not widely adopted in India.

However, the startup benefited from subsequent government regulations, including the mandatory implementation of e-filing five years ago.

Despite a population of 1.4 billion, the number of Indian taxpayers remains relatively low, with approximately 60 million individuals filing returns.

This has prompted Clear to diversify its services to include business solutions, as well as offerings in credit and wealth management.

Nitin Saigal, founder and CIO of Kora, expressed excitement about partnering with Clear, highlighting their innovation within the Indian SaaS ecosystem.

Gupta indicated that the newly acquired funds will be used to expand the company’s service offerings and initiate international expansion.

Clear currently serves businesses in the Middle East and intends to extend its reach to businesses in Europe in the near future.

Stripe’s Broader Strategy in India

Gupta also welcomed the new investors, emphasizing Kora’s experience in emerging markets and Stripe’s expertise in building economic infrastructure for the internet.

He further stated that India’s ongoing digitization, coupled with factors like electronic invoicing, GST, UPI, affordable mobile internet, and the accelerated adoption of technology due to Covid-19, presents a favorable environment for Clear’s growth.

Stripe has not yet made significant inroads into the Southeast Asia and India markets, despite having teams stationed in both regions.

Should Stripe choose to expand into the world’s second-largest internet market, it would face competition from companies like Razorpay, which is backed by YC and Sequoia Capital India and recently received funding from Salesforce.

Additional Investment: XFlow

Updated October 25, 11.22PM: Stripe has made a third investment in an Indian startup, XFlow, a company focused on building cross-border payments infrastructure.

XFlow was co-founded by Anand Balaji, former head of Stripe India, and Ashwin Bhatnagar, who previously oversaw product development for Stripe in India.

Bhatnagar announced via Twitter that XFlow has secured funding from Stripe, General Catalyst, and Lightspeed India, though the exact amount was not initially disclosed.

A source familiar with the matter confirmed the investment totaled $6 million and occurred several months ago.

XFlow had been operating in stealth mode until this announcement, with a focus on enabling seamless cross-border money movement for merchants.