Mswipe raises $25M from Falcon Edge, Ola, Meru Capital & existing investors

Mumbai-based mobile point of sales (PoS) payment services provider Mswipe Technologies Pvt Ltd has raised $25 million (Rs 159 crore ) in its Series C round of funding from hedge funds Falcon Edge Capital and Meru Capital besides cabs aggregator Ola that also happens to be a portfolio company of Falcon Edge.

Its existing investors—Matrix Partners India, Axis Bank and DSG Consumer Partners—also participated in the funding round, as per a press statement.

The capital will be used to expand its merchant aggregator business and acquire more customers.

"Mswipe aims to provide seamless mobile POS solutions to 1 million merchants across 400 Indian cities and towns and create India's largest financial services platform for SMEs," said Manish Patel, founder and MD, Mswipe.

Mswipe was set up in March 2011 by Patel, who holds a degree in medicine from Mumbai University. Prior to starting Mswipe, he co-founded Milestone Merchandise, an alcohol-beverages distribution company.

The company targets SMBs with its PoS solutions. It offers a mobile phone-based PoS service for small merchants that enables plastic card payments via mobile phone. It also provides a card reader that can be attached to any mobile phone (be it smartphone or feature phone) via a 3.5mm headphone jack. Once attached, the card reader converts the mobile phone into a card acceptance device.

Mswipe had raised $10 million in Series B round of funding, led by Matrix Partners and DSG Consumer Partners, with participation from Axis Bank over a year ago.

In January 2013, Mswipe had secured Series A funding, led by Matrix Partners. Axis Bank had also participated in that round.

Prior to that, it raised an angel round from a group of investors, including Deepak Shahdadpuri, founder of DSG Consumer Partners, and Praveen Chakravarty, former head of investment banking at Anand Rathi, in 2012.

For Falcon Edge, this is the fourth deal in Indian tech space since last December when it backed Housing.com. It has also invested in Ola and NewsHunt.

Meanwhile, for US-based hedge fund Meru Capital, co-founded by a bunch of executives of Indian origin, this is the first known investment in India.

For Ola too, this is the first known venture style investment in another Indian startup. It has only acquired other firms to date including TaxiForSure and a smaller peer GCabs.

Avendus Capital was the exclusive advisor to Mswipe in the latest transaction.