New Delhi, Jun 21: If investors backed wallet firms with money post demonetisation, they have now shifted focus to allied payment companies which range from mobile payments to last mile solutions.
For instance, only one deal out of 23 that happened in the last 12 months in the payments space went to a wallet company (Paytm) while at least 13 deals happened in allied spaces such as payments processing, last mile payments and merchant on-boarding. According to data compiled by News Corp VCCEdge, $1.5 billion flowed in the payments industry last year.
And this is just the tip of the iceberg. Mobile payments alone gathered close to $1.51 billion in the year 2017 through 13 rounds of funding, according to data compiled by Tracxn. Investors say that the money is going beyond wallet businesses now into last mile solutions because the payment systems are maturing and the industry is leaping into the next stage where collaborations happen and solutions are end-to-end.
“If you are a middleman just doing payments for some merchants, your story is over. But if you are helping payment companies work or offering the full stack of solution from merchant onboarding to payment settlements, you are sitting on a gold mine,” said Vikram Chachra, Founding Partner of early stage fund Eight Innovate which has invested in companies like Ezetap.
Chachra said that his investing thesis about companies like Ezetap and Signzy is that anything that helps faster merchant onboarding and converts cash users to digital payments is worth looking at. Another company taking payments to the last mile is Instamojo, founded by Sampad Swain.