Fintech firm Innoviti secures debt financing from Trifecta, NBFCs

Bengaluru-based fintech firm Innoviti Payment Solutions Pvt. Ltd has raised Rs 80 crore ($11.55 million as per current exchange rates) in a round led by venture debt firm Trifecta Capital, a company statement said.

A clutch of non-banking financial companies also put in money in the round, which comprised a combination of debt, venture debt and asset financing, the statement added.

The company will use the debt funding to expand its business by purchasing infrastructure such as servers and terminals as well as for other product development, the statement added.

The company plans to connect its payment and lending platform to set up a solution for supply chain cash flow management, the statement said.

“With our enterprise business turning cash positive we have blended our fund raise strategy with debt, that we believe will help in delivering superior returns to all stakeholders,” said Rajeev Agrawal, chief executive of Innoviti.

Innoviti offers enterprises a payments solution through its advanced patented uniPAY Next Technology platform.

The venture was founded in 2002 by Agrawal, who holds a B Tech degree and PhD from IIT-Bombay. Before wearing the entrepreneurial hat, he had worked with technology firm Sasken Communications in Bengaluru.

The company’s payments business, launched in 2008, helps merchants receive payments across channels, including online, mobile, in-store and at the time of delivery of a product. Through smelending.com, the company helps businesses get short-term loans of Rs 30,000 for 15 days or more.

Innoviti claims to process over Rs 20,000 crore of payment transactions annually including Rs 1,000 crore of credit across 50,000 point-of-sale terminals every year. Smelending.com has processed more than 150,000 loans annually for over 30,000 small businesses. It has so far disbursed $500 million loans.

The firm’s client base of merchants include Reliance Retail, Titan, Landmark Group, INOX, Indigo and Walmart, among others. Lenders such as HDFC Bank, ICICI Bank, Axis Bank, State Bank of India, Standard Chartered, Kotak Mahindra Bank and Citibank use the platform to process their customers’ payments and to distribute loans.

The company last raised $18 million (Rs 120 crore then) in July 2017 in a Series B round from SBI-FMO Fund, Bessemer Venture Partners LP and existing investor Catamaran Ventures.

The SBI-FMO Fund is a joint venture between Japan’s SBI Holdings Group, which is a spinoff of SoftBank Group, and Dutch development bank FMO.

Since that round, the company claims to have grown 2.5X in volume, clocking $5 billion of annual processing volume. It now processes nearly 5% of all offline PoS-based digital transaction volumes in India.

In July 2015, it secured $5 million in a Series A funding round from NR Narayana Murthy’s investment arm Catamaran Ventures and Canada-based New India Investment Corporation.

Trifecta Capital

The venture debt provider was set up in 2014 by Nilesh Kothari and Rahul Khanna and manages a corpus of Rs 500 crore. RBL Bank and Azim Premji Trust are the anchor investors in its first fund, from which it provides early-stage debt capital, between 15-17%, to technology companies. It also looks to acquire a stake in companies through cashless warrants or partly paid-up shares.

It has backed more than 40 companies such as BigBasket, Paper Boat, Rivigo Nephroplus, Urban Ladder, Industrybuying, OneAssist, Urban Clap, IdeaForge and more from its maiden fund.

The company is in the process of raising an investible corpus of Rs 1,500 crore for its second investment vehicle.

Venture debt has emerged as an important tool of funding for companies as it rarely involves stake dilution by promoters. It also gives companies a longer runway to grow.