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Mswipe raises $31 million in Series D

The round was led by UC-RNT fund, a joint venture between Ratan Tata's RNT Associates and the University of California, along with participation from existing investors

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Mobile point of sale (mPOS) solution provider Mswipe Technologies Private Limited has raised a Series D funding of $31 million from UC-RNT fund, a joint venture between Ratan Tata’s RNT Associates and the University of California. Existing investors Matrix Partners India, Falcon Edge Capital, and DSG Consumer Partners also participated in the round. The startup plans to use the funds to develop their network of merchants accepting digital payments in the country.

At present, Mswipe, based in Mumbai, has a network of 246,000 terminals across 550 cities in India and over 80 percent of their customer base comprises SME merchants. Typically supported by 1-30 employees, the turnover of these outlets is in the range of Rs 1-5 lakh a month, and most of these merchants can accept credit and debit card payments for the first time through Mswipe, the company says in a press statement. The annual value of transactions stands at Rs 9,560 crore. The transaction value on the Mswipe network grew by four times while the number of installations grew by three times in the last year.

“With merchants of all sizes actively looking to enable digital payment acceptance at their establishments, we expect to grow exponentially going ahead, create card and electronic payment acceptance infrastructure across cities and widen our user base,” says Manish Patel, who founded Mswipe in 2011 and is the CEO.

“Having been engaged with the Company for about two years now (since the last round) – we have been highly impressed with the sharp focus on execution by Manish and the Mswipe team. Mswipe has stayed ahead in the product innovation curve and has successfully managed to continuously adapt to the dynamic digital payments space in India. Investment by UC RNT along with additional infusion by existing investors will enable the company to scale further and help accelerate market expansion,” says Abha Agarwal, Director, Investment Banking, Avendus Capital tells Forbes India. Avendus Capital is the exclusive financial advisor to MSwipe for the fund raise.

Mswipe has two things going in its favour. A recent study by Boston Consulting Group states that MSMEs will be indispensable stakeholders in India's journey towards a cashless economy. Secondly, according to RBI, the number of transactions through POS terminals stood at 233.4 million in May 2017, valued at Rs 450.8 billion. In contrast, digital wallets accounted for 91.3 million transactions and a total value of Rs 25.3 billion. Therefore, while there are numerous cashless channels, POS terminals are still among the most widely used instruments available in India.

Vikram Vaidyanathan, managing director, Matrix India, says, “In a rapidly changing payments landscape, Mswipe’s open technology platform and ability to deliver solutions at the lowest cost sets them apart.”

It recently acquired PayU’s offline POS division, partnered with Samsung Pay, Sodexo and launched BharatQR and UPI acceptance for Mswipe’s merchants showcasing their ability as an open platform capable of accepting all digital payments.

Patel adds that the startup is now looking at developing the next generation Android based smart POS terminals that will offer merchants capabilities like GST compliant billing and inventory management with integrated and seamless payment acceptance, on the same device. “All this, while ensuring the same level of security and trust for the customers,” he says.

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