Recently, Indian business payments startup PayMate announced that it is seeking $25 million in Series D funding. The firm plans to use its new cash injection to expand its operations beyond its native country. The company’s Founder and CEO, Ajay Adiseshann, told TechCrunch that the corporation has already raised a “substantial” portion of the funding it’s currently seeking.
He also disclosed that Brand Capital, Recruit Strategic Partners, and Visa had joined its current funding round.
PayMate’s Financial Services
Formed in 2006, PayMate began its life as a consumer-oriented payments service. However, Adiseshann determined that his company functions better as a business-to-business operation. Consequently, the startup now uses its cloud-based products to help firms of all sizes keep track of invoices and payments from customers and vendors.
Furthermore, the Mumbai-based firm has started serving as an intermediary between financial institutions and local businesses. In 2018, the company acquired a peer-to-peer lending startup called Z2P Technologies. Leveraging its acquisition’s technology, the firm uses client financial data to assign creditworthiness scores to its partners.
PayMate then works with banks and credit card brands like Visa to help its qualified clients secure lines of credit.
Overall, the company has become quite successful in its decade-plus operation. It currently maintains a user base of 35,000 and processes $5 billion in payments every year. Accordingly, its planned expansion into Africa and Europe should go very well.
The Visa Connection
Visa’s decision to invest in a promising fintech startup wouldn’t usually be surprising. However, given the corporation’s recent moves, it is now.
Last month, Facebook announced that Visa would be joining Mastercard, eBay, and Lyft in developing its Libra cryptocurrency. As part of the Libra Association, Visa will be responsible for providing the digital coin’s administration and financial backing.
In its crypto white paper, Facebook noted that it hoped to use Libra to provide the people of financially disadvantaged nations with banking services by next year. However, the social network has faced intense resistance since revealing its intentions to enter the financial sector. Regulators in the United States, United Kingdom, European Union, and China have expressed concerns about the coin’s impact on the global financial system.
Additionally, due to its ban on cryptocurrencies, India‘s Economic Affairs Secretary, Subhash Garg, announced that Libra wouldn’t be welcome in the country. Now that it is facing widespread government scrutiny and exclusion from a lucrative market, industry analysts are questioning Libra’s viability.
Overall, Visa seems aware that Libra could potentially implode, as it’s now investing in a competing financial services product. However, one could argue that the firm isn’t undercutting the project because PayMate and Libra operate in two different markets. But the startup is seeking funding to expand into regions Libra would undoubtedly want to pursue.
As such, Visa’s backing of PayMate seems like a subtle no-confidence vote in Libra.