Cashfree, an Indian company providing a comprehensive suite of payment solutions for businesses, has secured $35.3 million in a recent funding round as the already profitable organization aims to expand its services.

The Series B investment for the Bangalore-based startup was spearheaded by Apis Partners, a London-based private equity firm investing through its Growth Fund II, with continued support from existing investors Y Combinator and Smilegate Investments. This new financing brings the company’s total funding to $42 million.

Cashfree began operations in 2015, initially focusing on a solution for restaurants in Bangalore needing a streamlined method for delivery staff to collect payments from customers.

Akash Sinha and Reeju Datta, the founders of Cashfree, entered the payments sector without prior experience in the field. However, requests from their merchants to develop an online payment acceptance service led them to recognize the potential for Cashfree to address a broader market.

In its early stages, Cashfree faced difficulties attracting investment, as many investors doubted the potential for rapid growth within a payments processing company. This situation changed when Y Combinator accepted their application, despite the founders missing the application deadline and being unable to immediately join the program. Y Combinator subsequently provided funding for Cashfree’s seed round.

Currently, five years later, Cashfree provides a portfolio of over a dozen products and services, assisting more than 55,000 businesses with tasks such as employee salary disbursement, online payment acceptance, recurring payment setup, and marketplace commission settlements.

Notable clients include financial technology company Cred, online grocery retailer BigBasket, food delivery service Zomato, insurance providers HDFC Ergo and Acko, and travel booking platform Ixigo. The company collaborates with numerous banks and offers integrations with platforms like Shopify, PayPal, and Amazon Pay.

Cashfree operates in a competitive market with many other startups, but it possesses a distinct advantage. According to Sinha, who also serves as the company’s chief executive, Cashfree has been profitable for the last three years.

“Cashfree has established itself as a leader in the industry and is now experiencing significant growth driven by the development of unique and innovative products tailored to meet customer needs,” stated Udayan Goyal, co-founder and managing partner at Apis.

The company processed over $12 billion in payment transactions during the financial year ending in March. Sinha explained that a portion of the new funds will be allocated to research and development to enhance its technology infrastructure and create additional services, including solutions for digitizing offline payments for its clientele.

Cashfree is also developing cross-border payment solutions to capitalize on opportunities in developing markets, he added.

“We continue to view the payments industry as dynamic and evolving, presenting ongoing challenges. We will be investing in both next-generation payments and banking technology to simplify and enhance the reliability of payment processing. With a strong foundation of proprietary technologies, technology-driven procedures, and extensive industry expertise, we are confident in our ability to grow Cashfree into the leading payments provider in India and beyond,” he concluded.