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Written by Manish Singh

Tiger Global backs Indian crypto startup Coinswitch Kuber at over $500M valuation

Coinswitch Kuber, a startup that allows young users in India to invest in cryptocurrencies, said on Thursday it has raised $25 million in a new financing round as it looks to expand its reach in India, the world’s second largest internet market and also the place where the future of private cryptocurrencies remains uncertain for now.

Tiger Global financed the entire Series B funding round of Coinswitch Kuber and valued the three-year-old Indian startup at over $500 million. The announcement of Series B comes just three months after Coinswitch closed its $15 million Series A round from Ribbit Capital, Sequoia Capital India, and Kunal Shah. The Bangalore-based startup has raised $41.5 million to date.

TechCrunch reported earlier this month that the New York-headquartered technology hedge fund had led or was in advanced stages of talks to lead investments in many Indian startups including Coinswitch.

Coinswitch Kuber is one of the handful of startups operating in the cryptocurrency space today. The startup allows users to buy slivers of several popular cryptocurrencies. A user on Coinswitch, for instance, can buy as small as 100 Indian rupees ($1.3)-worth of Bitcoin.

The startup said it has amassed over 4.5 million users, more than half of whom are aged 25 or younger. In less than a year, Coinswitch Kuber processed transactions over $5 billion.

But how the startup performs in the future is not entire in its hand.

While trading of private cryptocurrency such as bitcoin is currently legal in India, New Delhi is widely expected to introduce a law that bans all private cryptocurrency.

Ashish Singhal, co-founder and chief executive of Coinswitch Kuber, said he is optimistic that India will not ban private cryptocurrencies, and said the startup closed the financing round with Tiger Global before New Delhi’s indication to formulate a law.

“This investment round brings us at par with some of the most sought after cryptocurrency companies in the world and sets us up for the long run,” said Singhal.

In recent months, some startups in India have started to explore a contingency plan in case India does end up banning cryptocurrency trading in the country. Many startups are today building in India, but focusing on serving customers overseas.

“As they build India’s leading cryptocurrency platform, CoinSwitch is well positioned to capture the tremendous growing interest in crypto among retail investors. We are excited to partner with CoinSwitch as they innovate in this emerging asset class,” said Scott Shleifer, Partner at Tiger Global, in a statement.

Chargebee valued at $1.4 billion in new $125 million fundraise

A startup that enables businesses to set up and manage their billing, subscription, revenue operations and compliance has become the newest firm to earn the much coveted unicorn status.

Chennai and San Francisco-headquartered Chargebee said on Tuesday it has raised $125 million in its Series G financing round led by Sapphire Ventures and existing investors Tiger Global and Insight Venture Partners.

The new financing round valued the 10-year-old startup at $1.4 billion, a 3x increase since the Series F round six months ago. Some other existing investors also participated in the new round, said Chargebee, which has raised $230 million to date.

If you’re a business, setting up and managing a subscription service — to ensure recurring revenue — could prove to be a complex process. You may want to offer a free 30-day trial to new potential customers. What if some customers want to move to a different pricing tier? These are some of the problems Chargebee is equipped to handle.

Chargebee helps individuals, small and medium-sized businesses and enterprises set up, manage, and automate subscriptions, billing, invoicing, and payments.

One of the key strengths of Chargebee is that it can help even large enterprises move to a subscription model within 10 days.

The industry is going through a “significant change” with businesses digitally transforming themselves and moving to the SaaS model, Krish Subramanian, co-founder and chief executive of Chargebee, told TechCrunch in an interview. And it’s this change that has made Chargebee so vital to thousands of companies today.

Chargebee was founded in an apartment in Chennai, a city on India’s southeastern coast. Subramanian has credited reading blog posts by Joel Spolsky, founder of Trello, as an early inspiration to start his own venture.

“He was solving a very boring problem but in very interesting ways, and he used to share the story of how he is building a company,” he said in an earlier interview. “That was my inspiration that I should start my company like that. So while working at other companies we saved enough and acquired skills to start this.”

The startup’s offerings today are not limited to just billing. It also helps businesses plug revenue leakage, increase customer loyalty, expand into new categories with the backend ready, and experiment with pricing plans — introducing and removing them within 30 minutes.

It supports over 100 currencies, and dozens of popular payment gateways, including Stripe, Braintree, WorldPay and PayPal, and its global tax management coverage also helps businesses to expand to new markets. MakeSpace, an on-demand storage company, used Chargebee’s services to scale from four markets to 31 in one year, for instance.

The startup has amassed over 2,500 customers, most of whom are based in the U.S. and Europe. Some of these customers include brands such as cloud software Okta, business software firm Freshworks, calendar invites manager Calendly, training platform Linux Academy, and Japanese tech giant Fujitsu.

Subramanian said Chargebee’s revenue has doubled in the past 12 months and customer’s revenue has grown by 125%, though he didn’t disclose figures.

He said that like other businesses, Chargebee has been cautiously navigating the global pandemic. The fundraise six months ago ensured that the startup had enough capital in the bank to operate comfortably, he said.

But the recent growth Chargebee has seen prompted the startup to grow more aggressive. “There’s a window of opportunity for the next five years for us to build out this category beautifully and serve a lot of customers,” he said. “And that’s what led the startup to explore the new financing round, he said, adding that the fact that the cost of capital is lower currently in the market also played a role.

“As the global shift to subscription-first models continue to grow in popularity, Chargebee has an incredibly bold vision for new products for multiple market segments,” said Rajeev Dham, Partner at Sapphire Ventures, in a statement. “After years of knowing them, I’ve been most impressed by their thoughtfulness and execution in building Chargebee as the emerging category leader that is reinventing the broader space.”

Chargebee will deploy the fresh capital to expand its suite of products and work on new capabilities to help enterprises in even more ways.

Tuesday’s announcement comes at a time when a slice of Indian startups are raising large amounts of capital at a much more frequent pace and at increased valuations as investors double down on promising bets in the world’s second-largest internet market. Chargebee is the seventh Indian startup to turn a unicorn this month, and 11th this year.

Indian startups social commerce Meesho, fintech firm CRED, e-pharmacy firm PharmEasy, millennials-focused Groww, business messaging platform Gupshup and social network ShareChat attained the unicorn status earlier this month. TechCrunch reported last week that SoftBank is in talks to invest in Zeta and Swiggy. Razorpay on Monday announced new fundraise that valued it at $3 billion.

India’s Razorpay raises funds at $3 billion valuation ahead of Southeast Asia launch

Six-year-old Bangalore-based fintech Razorpay topped a $1 billion valuation late last year, becoming the first Y Combinator-backed Indian startup to reach the much sought after unicorn status. In less than six months since, the Indian startup has tripled its valuation and is preparing to launch in the Southeast Asian markets.

Razorpay said on Monday it has raised $160 million in its Series E financing round that valued the startup at $3 billion, up from “a little over” $1 billion valuation in the $100 million Series D in October last year.

The new round has been co-led by existing investors Singapore’s sovereign wealth fund — GIC — and Sequoia Capital India. Some other existing investors including Ribbit Capital also participated in the new round, which takes Razorpay’s to-date raise to $366.5 million.

Razorpay accepts, processes and disburses money online for small businesses and enterprises — essentially everything Stripe does in the U.S. and several other developed markets. But the Indian startup’s offering goes much further: In recent years, Razorpay has launched a neobanking platform to issue corporate credit cards (and more at the bottom of the article), and it also offers businesses working capital.

With the global giant Stripe still nowhere in the Indian picture, Razorpay has grown to become the market leader. And now, the startup plans to replicate its success from the home country in Southeast Asian markets, Harshil Mathur, co-founder and chief executive of Razorpay told TechCrunch in an interview.

“We are one of the largest payments providers in the Indian ecosystem. We want to take the learnings we have in India to the Southeast Asian market. Before the end of the financial year, we want to launch in one or two Southeast Asian markets,” said Mathur, adding that the new round gives it the valuation to more confidently explore some M&A opportunities to accelerate growth.

More than 5 million businesses in India rely on Razorpay’s technology to process payments. Some of these clients include Facebook, telecom operator Airtel, ride-hailing firm Ola, food-delivery startup Swiggy, and fintech CRED.

Mathur and Shashank Kumar — pictured above — met at IIT Roorkee college. The duo realized early on that small businesses faced immense difficulties in accepting money digitally and the existing payments processing firms weren’t designed to tackle the needs of small businesses and startups.

Solving this issue became Razorypay’s goal, and in the early days about 11 individuals shared a single apartment as the co-founders scrambled to convince bankers to work with them. The conversations were slow and remained in a deadlock for so long that the co-founders felt helpless explaining the same challenge to investors numerous times, they recalled in an interview two years ago.

The stories one hears about Razorpay today have changed dramatically. In a Clubhouse room, known for sharp criticism of products, dozens of developers and startup founders recently recalled their early interactions with Razorpay, and how the startup’s officials helped their businesses start with — or move to — the Razorpay’s system within hours of being first reached out.

Deepak Abbot, co-founder of Indiagold, recently recalled an incident where the startup had missed an alert, that coupled with a snafu at the bank resulted in the startup running out of funds to pay customers.

Last year, Mathur said Razorpay’s core business — processing payments — is fast-growing and the startup would focus more on building the two new offerings.

Offering an update, Mathur said Razorpay X now serves about 15,000 businesses, up from fewer than 5,000 in October last year. Razorpay Capital is now annually bandying out about $80 million to clients, up from less than $40 million a year ago. The duration of the loan Razorpay gives ranges from three to six months, and the ticket size of these loans is typically between 0.8 million to 1 million Indian rupees ($10,730 to $13,400).

Mathur said the startup will focus on further growing this business in the next three years and then explore taking the startup public. “If it was just the payments processing business, we could go public right now. But our ambitions are beyond that so that we become the full ecosystem for businesses. And on those sides (neobanking and lending), we are early,” he said.

The startup’s marquee offering has grown 40-50% each month in the past six months. It now plans to process over $50 billion in total payment volume by the end of 2021.

The startup also plans to hire a number of people. It currently has over 600 positions, several in Southeast Asian markets.

Monday’s announcement comes at a time when a slice of Indian startups are raising large amounts of capital at a much frequent pace and increased valuations as investors double down on the world’s second largest internet market.

Indian startups social commerce Meesho, fintech firm CRED, e-pharmacy firm PharmEasy, millennials-focused Groww, business messaging platform Gupshup and social network ShareChat attained the unicorn status earlier this month. TechCrunch reported last week that SoftBank is in talks to invest in Zeta and Swiggy.

*Razorpay offers a number of value-added services such as automating vendor payments, real-time reconciliation and analytics, managing subscriptions, GST invoicing, designing and creating websites. The startup has also developed an app-based substitute for payments terminals (also known as POS) as well as pay-by-link for enabling offline commerce.