Payments solutions firm Oxigen Services in talks to raise $50M funding

Gurgaon-based payments solutions provider Oxigen Services India Pvt Ltd is in advanced talks to raise $50 million in fresh funding from a mix of strategic and PE investors, besides multi-national agencies, a top executive of the company told Techcircle.in.

"The funds will be used to expand our mobile wallet offerings to multiple merchants, in addition to marketing and promotions," said Pramod Saxena, co-founder of the company.

The report first appeared in The Times of India.

Oxigen also plans to raise another $150 million afresh to transform itself into a payment bank when the Reserve Bank of India comes out with the final guidelines by June next year. The payment bank licence allows licensees to accept demand deposits and remittances of funds.

Oxigen had earlier raised an undisclosed amount in funding from PE firm Citigroup Venture Capital International, which later sold its significant minority stake to IT giant Microsoft in January 2008.

Oxigen was started by IIT-Roorkee graduate Saxena, along with South African firm Blue Label Telecom in 2004 as a mobile recharge business. The firm later added other payment services like airline/rail/bus/movie tickets bookings. It later started providing inward remittance facilities targeting the youth and partnered with cafes and movie booking centres.

In August, it launched a m-wallet service, called Oxigen Wallet, to enable users to transfer money, and purchase gifts for their friends & family on social networking platforms.

The company is currently working towards the creation of a merchant universe for acceptance of its m-wallet for payments at several establishments that will allow cashless and cardless transactions. It is presently accepted at more than 3,000 merchant locations, including 1,400 Café Coffee Day outlets and over 2000 online portals.

Oxigen claims that it facilitates over 1 lakh transactions per day using its m-wallet. Last year, it generated an annual gross transaction value of Rs 4,000 crore and is currently cash positive, Saxena said.

The company has six regional offices across India with headquarters in Gurgaon with a team size of 400 people.

Oxigen competes with Euronet and Cyberplat in the recharges space; Eko, Suvidhaa and The Smart Shop in the B2C money transfer space; and Airtel Money in the P2P money transfer segment. It also competes with One97 Communications' Paytm, MobiKwik and Citrus Payment Solutions in the mobile wallet space.