TECH

Krafton Drives Cashfree’s $53 Million Funding Round, Elevating Valuation to $700 Million

Cashfree, an Indian payments startup processing over $80 billion each year for its clients, has successfully secured $53 million in a recent funding round aimed at bolstering its operations in select international markets.

The Series C funding round was led by Krafton, the company known for hit games like PUBG and BGMI, with support from existing investor Apis Growth Fund. Wednesday’s announcement revealed that the nine-year-old startup, which has raised nearly $100 million to date, has reached a valuation of $700 million, according to sources familiar with the matter.

This unique partnership, where a gaming company invests in a payments startup, has emerged from the mutual strategic benefits identified by executives from both firms during an interview with TechCrunch.

“Krafton is a major player in the digital content space, and payment solutions like ours see a considerable market opportunity alongside sectors such as e-commerce, travel, and other financial services,” noted Akash Sinha, co-founder and CEO of Cashfree. “There are substantial synergies in streamlining payment processes for smaller transaction sizes.”

Krafton views Cashfree as a crucial payments partner, not just for its operations but also for its expanding portfolio of startups in India, many of which may soon consider utilizing Cashfree’s services. Although the two companies do not currently handle transactions for games like BGMI, they confirmed that discussions are already in progress for an upcoming partnership.

“India’s fintech landscape is experiencing remarkable growth, and we believe that Cashfree Payment’s leading position in India can be replicated on a global scale,” expressed Sean Hyunil Sohn, CEO of Krafton India.

Based in Bangalore, Cashfree serves over 800,000 businesses, including well-known brands such as Swiggy, Zepto, and Bajaj Finance, providing a range of solutions with access to more than 100 payment methods. The startup has witnessed a notable 130% increase in merchant registrations in the current fiscal year, with a strong focus on expanding in the UAE and other Middle Eastern markets.

“The MENA region presents a substantial opportunity,” Sinha emphasized. “Our aim is to establish ourselves as leaders in this area, targeting key markets such as UAE, Saudi Arabia, and Egypt, as well as smaller regions like Jordan and Kuwait.”

The founders of Cashfree entered the payments arena somewhat unexpectedly. In 2015, Akash Sinha and Reeju Datta began with a simple service: assisting delivery drivers in Bangalore with cash collection from customers. Without prior experience in payments, they soon recognized a broader potential as their restaurant clients requested online payment options.

Initial investors were skeptical, questioning whether a payment processing startup could achieve significant scalability. However, acceptance into Y Combinator altered that perception, even though the founders missed application deadlines and could not join the cohort in time.

Recently, Cashfree obtained two additional licenses, including one for cross-border transactions, and has started servicing various international clients.

Cashfree’s technology can handle up to 12,000 transactions per second during peak times. Additionally, the startup has introduced SecureID, an identity verification system that has completed over a billion verifications, aiding businesses in reducing fraud and minimizing customer drop-offs during onboarding.

Cashfree is one of the first companies to gain approval from India’s central bank to function as a payment aggregator for both domestic and international transactions. Incubated by PayPal, the startup counts Y Combinator and the State Bank of India among its early investors.

For Krafton, this investment aligns seamlessly with its broader strategy in India, where it has invested nearly $200 million across various startups.

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