Cashfree Success Story - Full Stack Payment Solution
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The Indian digital payments industry stands at ₹2,153 Tn i.e., ~961% of GDP (source: RedSeer report) as of 2022. Cashfree has rapidly grown in the country’s competitive environment to the point where it is now dominating the payment disbursals with more than 30% market share among payment processors. Founded by Akash Sinha and Reeju Dutta, Cashfree is a full-stack payments solution that is helping Indian businesses accept and send money.
An interesting point to note! Cashfree has been profitable since its first year of operations (2016) and has reported a revenue of around INR 100 crores in FY20 and a profit after tax of INR 20 crores. Know more about Cashfree's business model, how it started, its funding and investors, growth, and more, in this post ahead.
Owing to the tremendous growth of Cashfree, StartupTalky interviewed Mr. Akash Sinha, CEO & Co-founder of the company to know the Success Story and Startup Journey of Cashfree.
Cashfree - Company Highlights
| Startup Name | Cashfree |
|---|---|
| Founders | Akash Sinha (CEO), Reeju Dutta |
| Launch Year | 2016 |
| Headquarters | Bangalore |
| Sector | Fintech, Digital Payments |
| Website | cashfree.com |
About Cashfree
Cashfree - Industry
Cashfree - Founders and Team
Cashfree - Startup Story | How it Started?
Cashfree - Startup Launch
Cashfree - Mission and Vision
Cashfree - Name, Tagline and Logo
Cashfree - Product/Service and USP
Cashfree - Business Model and Revenue Model
Cashfree - Customer Retention Strategies
Cashfree - Challenges faced
Cashfree - Marketing Strategies
Cashfree - Revenue and Growth
Cashfree - Funding and Investors
Cashfree - Partnership
Cashfree - Acquistion
Cashfree - Investments
Cashfree - Competitors
Cashfree - Recognition and Achievements
Cashfree - Future Plans
About Cashfree
Cashfree offers businesses the fastest and most seamless way to collect and disburse payments at scale. The company’s products include a payment gateway, payout processing, marketplace settlements, Cashgram, Subscriptions, bank account verification, UPI Stack, Instant Refunds, Global Payouts, and auto-collection via virtual bank accounts.
Cashgram is Cashfree’s innovative web link that allows users to provide account details and receive payments instantly from businesses. Cashfree is leading the way in payments innovation with faster settlements, advanced fast-refund solutions, and higher success rates on online transactions.
The company has introduced solutions like Instant Settlements on its payment gateway; recurring payments via Subscriptions; and a UPI stack with 15+ ready-to-use integrations for all business payment needs including collections, disbursals, and verifications using UPI infrastructure. Furthermore, Cashfree also has specific solutions tailored for NBFCs - Lending, Insurance, E-commerce, and Education verticals.
Since Cashfree’s inception in 2015, the company has built a strong presence among enterprises by innovating for experience, scale, and security. The payment industry is still seen as an evolving industry with its own challenges.
Ansh Mehrey
Cashfree - Payments Industry Details
The market for payment processing is robust in India. Payment processors use gateways to authorize direct payments across networks of online retailers, storefronts, credit cards, and individuals. That’s why Cashfree has rapidly grown in the country’s competitive environment to the point where it is now dominating payment disbursals with more than 30% market share among payment processors.
According to a report by RedSeer, the Indian digital payments industry stands at ₹2,153 Tn (~961% of GDP) and will grow at 27% CAGR to reach ₹7,092 Tn (~2278% of GDP) by FY25 . This growth will be driven by:
- Strong use case of merchant payments across user cohorts
- Government policies such as Jan Dhan Yojana, personal data protection bill along with the growth of MSMEs
- High smartphone penetration indicates strong headroom for growth through banking and financial services collaborations
Cashfree - Founders and Team
Akash Sinha (CEO) and Reeju Dutta are the founders of Cashfree.
Both Akash and Reeju were engineering graduates. Akash and Reeju were introduced to each other by common friends, people with whom they went to college with.
Akash Sinha (CEO & Co-founder, Cashfree)
Akash was working at Amazon writing software and leading a tech team. He has a technical background and has also worked at BankBazaar, a fintech company. With Akash’s experience as a programmer and product owner, at Cashfree, he focuses on the intersection of technology and business opportunities. As a community builder in the startup and entrepreneur space, he is excited and enthusiastic about cutting-edge technologies that can help businesses experiment, scale, and innovate faster.
Reeju Dutta (Co-founder, Cashfree)
Before co-founding Cashfree, Reeju was heading marketing at FabFurnish, an e-commerce retailer. He has a background in digital marketing. He has also worked at ZS Associates, a consulting firm, advising pharmaceutical companies on managing data. At Cashfree, he focuses on customer experience, sales & marketing, finance, and hiring. He is passionate about the growth of the startup ecosystem and enjoys interacting with businesses that offer innovative solutions.
In 2020, Cashfree strengthened its workforce to over 225 employees with hiring accelerated by the growth of e-commerce and digital payments sectors. By the end of 2021, Cashfree plans to further double its workforce to 400 team members, filling up critical positions as they gear up for the next wave of transformation. As the company builds agile digital payments products, it also plans to grow its sales and support teams.
Himaya Presthitha
Cashfree - Startup Story | How it Started?
In mid-2015, Akash Sinha (CEO and Co-founder, Cashfree) and Reeju Datta (Co-founder, Cashfree) were bouncing ideas off each other and looking for a co-founder to build on their ideas. Akash had an idea around an AI-based chat while Reeju was thinking of something around route logistics. They were brainstorming on what could work and what wouldn't be based on the market situation. Since hyperlocal commerce was thriving in 2015, Akash came up with the idea of finding a way to make their payments cashless - which until then was cash-intensive. That’s how Cashfree was born.
Akash and Reeju started Cashfree in 2015 and initially, they were digitizing offline COD payments. Then in April 2016, they got into the online space completely. When they started, it was only Reeju and Akash, along with another member who handled sales.
The idea worked well with night restaurants where it was difficult to make cash payments at odd hours. As a beta version, they launched a mobile web product were after the placement of an order. The customer receives a link to input their card details or uses their wallet to make the online payment. Soon after, the delivery person would get an SMS saying that the payment had been received.
A few such merchants approached them to process the payments for their businesses via their website as well and that is when Akash and Reeju started developing an online payment gateway.
Cashfree - Startup Launch
Initially, Akash and Reeju started out by working with small restaurants in Bangalore. They were focused on night delivery restaurants, as it was a segment that required alternate options for cash payments. So, night delivery restaurants are where they found their very first users.
Cashfree - Mission and Vision
Cashfree's mission is unwavering, which is "to enable online businesses to deploy payment solutions to innovate and scale."
The short-term vision is to invest in next-gen payments as well as banking tech to make payments processing easier and more reliable. The long-term vision is to grow Cashfree to be the leader in the payments space in India and internationally, backed by a solid foundation of in-house technologies, tech-driven processes, and in-depth industry knowledge.
Akash Sinha, CEO & Co-founder, Cashfree said, “At Cashfree, we are working towards boosting India’s fintech ecosystem, as it is the backbone of Digital India and is a key problem-solver of the economy.”
Cashfree - Name, Tagline and Logo
"Trusted by enterprises Loved by developers", goes the tagline of Cashfree.
Cashfree - Product/Service and USP
Cashfree has built a comprehensive payments toolkit for small to large businesses in India. It has launched various products and solutions with six first-of-its-kind fintech innovations including Payouts, Instant Refunds, Cashgram, Pre-Authorization, Subscriptions, Instant Settlements. Their products and solutions are aimed at making online payments easier and elevating customer experience through innovation and higher transaction success rates. The company’s products include a payment gateway, payout processing, marketplace settlements, Cashgram, Subscriptions, bank account verification, UPI Stack, Instant Refunds, Global Payouts, and auto-collection via virtual bank accounts.
- Payouts – The first gateway with a bulk disbursal solution for domestic and international payments. Payouts perform bank transfers to any unified payments interface, wallet, or debit card with more than 100 payment options and support for 30+ foreign currencies. It can also verify accounts in real-time.
- Instant Refunds – Launched on September 4, 2019, this was the first-time instant refunds were available on the Cashfree payment gateway. Merchants can initiate partial or full refunds from the dashboard or via an API. It seamlessly integrates with Shopify and Magento refund flows.
- Cashgram – COD orders providing instant refunds for the first time. Customers can send a Cashgram link to a user, who can specify a destination for payments or instant refunds.
- Pre-authorization – Provides the ability to block funds temporarily and debit the full or partial amount upon fulfillment. Customers can save payment gateway charges on canceled orders and integrate with their enterprise resource planning software. Users get real-time tracking of transaction progress.
- Subscriptions – Cashfree was one of the first gateways to offer recurring payments via the e-Mandate payment service initiated by the Reserve Bank of India and the National Payments Corporation of India.
- Instant Settlements – Cashfree delivered the industry-first and fastest instant bank settlements for payments collections (within 15 minutes).
- Co-lend – The first completely automated escrow management solution for co-lending in India, called "Co-lend," has been introduced by Cashfree on February 7, 2023. It allows for quick disbursal with automatic reconciliation and a dashboard for managing numerous partnerships.
- BNPL Plus – To help companies give their clients more inexpensive and flexible payment choices, the fintech platform Cashfree Payments has introduced 'BNPL Plus' in July, 2023.
- UPI Plug-in solution – The UPI Plug-in was introduced by Cashfree Payments, an API banking firm, on September 14, 2023 . It enables mobile-first businesses to accept UPI payments from clients without requiring them to leave the application.
Pivot from the Initial product offering
When Akash and Reeju reached out to businesses to partner with for their online cash-on-delivery needs, around 5-6 months down the line, merchants approached them for an online payment gateway (PG) service. That's why they went on to build the payment gateway for them because both the products were kind of similar, though not the same.
It was easy for the founders to transition to an online payment gateway. When they started rolling out the PG, they soon realized that there was still a need for a modern payment gateway that offered services like simple API integration, high transaction success rates, full collection on all the payment modes. That is how they transitioned into an online payment aggregator as businesses (customers) asked for it.
Purbalee Dutta
Cashfree - Business Model and Revenue Model
Cashfree is a full-stack payments solution that helps Indian businesses accept and send money and is used by 3,00,000+ businesses for vendor payouts, wage payouts, bulk refunds, etc. The company makes a fee of anywhere between 1.75% and 3% of the value of the transaction as of year 2020.
Yash Gupta
Cashfree - Customer Retention Strategies
Cashfree has focused on building exceptional payments products and developing innovations for merchants to minimize pain points associated with various payment use cases. This has led to a lot of organic growth for the company, driven by word of mouth and inbound traffic.
The high success rates of Cashfree’s flagship products such as Payouts and Cashgram have led to the company winning the trust of their customers. This led to these same customers also adopting some of the company’s other products to simplify payments.
Many of the payments products built by Cashfree were a result of direct feedback from existing customers on their payments challenges. The company saw these challenges as opportunities to develop products that would add value to their customers. One of the payment innovations that was a direct outcome of customer feedback is Cashfree’s Instant Settlements cycle - where Cashfree enables merchants to get access to their funds in 15 minutes. Merchants can make use of the settled funds for disbursals to vendors and other partners even on bank holidays.
Varad Kitey
Cashfree - Challenges faced
In early 2015 when Akash and Reeju first started out Cashfree, they were making prototypes in AI chat and logistics, but it didn’t work out, as a lot of hyperlocal commerce companies were using COD and there was no way to pay digitally.
That’s how they came up with their idea to use digital payment modes such as credit cards, debit cards, and netbanking. They were able to sign up 200-300 offline stores in Bangalore. They started at the right time, tried figuring out online payment pain points and ways to solve them.
Cashfree - Marketing Strategies
One of Cashfree’s most successful marketing campaigns was for the launch of the company’s e-commerce product suite. Cashfree’s e-commerce payments platform offers merchants the best payment experience for mobile and UPI payments and allows them to collect customer payments, process refunds, pay sellers and do a lot more. Along with the regular rollout of press releases, digital marketing, email marketing, and more.
Cashfree also hosted a series of fireside chats and webinars with thought leaders in the e-commerce space as a knowledge-sharing platform. This series of sessions not only helped Cashfree reach out to thousands of businesses but also helped many entrepreneurs understand the finer points of running a successful e-commerce venture.
Karan suri
Cashfree - Revenue and Growth
Cashfree reported revenue of around INR 100 crores (Rs 99.67 crores) in FY20 and a profit after tax of INR 20 crores. Cashfree processed over $12 billion in annualized payment volume, in March 2020. For FY21, Cashfree expected the transaction volumes to grow by 2-2 ½ times. The company had been recovering fast since July 2020 and expects to clock 3x growth both in revenue and volume. Cashfree has been profitable since its first year of operations and counts more than 50,000 businesses amongst its merchants including leading internet companies such as Cred, BigBasket, Zomato, HDFC Ergo, Ixigo, Acko, Zoomcar, and Delhivery, among others.
Cashfree’s solutions are used by over 10,000 e-commerce platforms including Nykaa, Furlenco, EaseMyTrip, Wakefit, Vero Moda among others. In 2020, Cashfree processed more than 2 crore transactions from e-commerce orders and expects to onboard 5,000 e-commerce companies by the end of the year.
Cashfree claims to process transactions worth $40 bn annually as of 2021. Furthermore, it has a over 50% market share among the payment processors. Besides, Cashfree helps 3,00,000businesses with a wide range of activities including payment collections, vendor payouts, wage payouts, bulk refunds, expense reimbursements, loyalty, and rewards. The Bengaluru-based fintech startup also boasts of an international presence in countries including the USA, Canada, and the UAE.
At the end of 2021, here are some growth highlights of Cashfree:
- Cashfree Payments boasted of a 50% market share in Payouts, thereby becoming the leading disbursals solution provider in India
- Cashfree received funds from SBI Bank, India's largest lender, which invested in the company, thereby boosting the company's operations and growth
- Cashfree saw a 95% rise in the number of merchants, which helped the company increase its merchant sign-ups by 268%
- It managed to process $40 Bn transactions annually
- Cashfree successfully served 200+ Million bank accounts and has grown beyond the startup status and has emerged as a bigger and better firm now
- Cashfree is currently serving 3,00,000 merchants
- The company successfully launched ‘Accounts’, which is designed to be a BaaS solution, which will help the neo-banks and fintech platforms integrate banking services into their products
- The company helped grow its employee count by 2X and s aiming to to double its employee count by 2022 end
- Cashfree also noticed an increasing amount of trust and credibility among its stakeholders due to the partnering of Cashfree with some of the leading brands including Dvara Solutions, Deskers, Zybra, Shipway, Shyplite, Shoptimize, Hylobiz, Syrow, and more. This list also included some of the leading internet companies like Cred, BigBasket, Zomato, HDFC Ergo, Ixigo, Acko, Zoomcar, Delhivery, and more.
Cashree has made it possible for users and businesses to transact with ease within software platforms with the release of its payment solution as per news report of March 6, 2024. All parties benefit from efficiency and ease as transactions happen directly without the need for external interfaces or redirects to the availability of more than 120 payment types.
Financials
| Cashfree Financials | FY23 |
|---|---|
| Operating Revenue | Rs 614 crore |
| Total Expenses | Rs 750 crore |
| Profit/Loss | Loss of Rs 133 crore |
Cashfree - Funding and Investors
The funding details of Cashfree is as follows -
| Date | Stage | Amount | Investors |
|---|---|---|---|
| June 7, 2021 | Funding Round | - | SBI |
| November 23, 2020 | Series B | USD 35.3 Mn | Apis Growth Fund II, Y Combinator |
| April 9, 2019 | Series A | USD 5.5 Mn | Y Combinator, George Osborne, Vellayan Subbiah |
| August 21,2017 | Pre Seed Round | USD 120K | Y Combinator |
| January 1, 2017 | Seed Round | - | - |
Cashfree has raised a total of USD 42 Mn to date. Cashfree's investors are - Y Combinator, George Osborne (former Chancellor of Exchequer of the UK), Vellayan Subbiah (former MD of Cholamandalam Investment), and APIS Growth Fund II.
Cashfree plans to use the latest round of series B funding for research & development and for creating new product lines. The company will strengthen its team in India and expand into some of the emerging markets.
The investments have supported Cashfree’s ambitious growth plans including launching and rolling out new products. More recently, the company introduced Global Payouts which enables it to offer fintech, e-commerce marketplaces, logistics platforms, remote staffing platforms, etc. based outside India, instant, simple and cost-efficient rails for bulk cross-border money transfers to India.
International businesses can use Cashfree's solution without having to set up a place of business in India. Cashfree also launched a payments toolkit for e-commerce stores and marketplaces in India. With a host of specific solutions, this product suite enables e-commerce businesses to collect payments on the website, mobile app, or any social media channel using Cashfree’s payment gateway, and to process partial or full refunds, facilitate seller payouts, split payments with multiple sellers and affiliate partners, and more.
Cashfree - Partnership
Cashfree has partnered with many companies some of the prominent partnerships are:
Shopify
In order to offer onsite card payments to Shopify's Indian merchants, Cashfree Payments has partnered with the Canadian e-commerce platform in September, 2023.
Yes Bank
Together with Yes Bank, Cashfree Payments is now able to provide exporters who have accounts there with "Global Collections," an international collection service on May 3, 2023.
Mobikwik
In order to provide its consumers with the convenience of interest-free credit at their fingertips, MobiKwik announced its partnership with Cashfree Payments on August 31, 2023, a top provider of payments and API banking services. "ZIP Pay Later" will be integrated with Cashfree Payments' Payment Gateway.
AutoPay on QR
'AutoPay on QR' has been launched by Cashfree Payments on September 12, 2023 a provider of payment and API banking solutions, in partnership with National Payments Corporation of India (NPCI).
Cashfree - Acquistion
Cashfree acquired two companies. The most recent acquistion is of Zecpe on February 28, 2023.
| Company Name | Date | Amount |
|---|---|---|
| Zecpe | Feb 28, 2023 | - |
| Telr | Nov 30, 2021 | $15M |
The company has exited Telr as per various news report.
Cashfree - Investments
Cashfree has made a strategic investment in Telr. The company invested 15 mn in the UAE-based payment gateway on November 30, 2021. This will further allow the company to expand its international footprints, which will start from the MENA region.
Jeenal Jain
Cashfree - Competitors
Payu, Paytm, CCAvenue are some of the top competitors of Cashfree.
Himaya Presthitha
Cashfree - Layoff
During a reorganization process, Cashfree has laid off up to 100 workers on January, 2023. In recent years, the SBI-backed company doesn't appear to have conducted any layoffs until now.
Cashfree - Recognition and Achievements
- Akash Sinha, CEO, and Co-Founder, Cashfree was listed in Forbes 30 under 30 2021
- Cashfree secured as the 5th fastest growing technology company in Deloitte Technology Fast 50 India 2020
Cashfree - Future Plans
Cashfree estimates 45,000 to 50,000 merchant leads per month and is optimistic in its continued development trajectory. With the goal of becoming profitable again by the first quarter of FY25, the company intends to improve customer satisfaction and service offerings as per news report of January, 2024.
This entails broadening the range of services offered, making infrastructural investments in technology, breaking into untapped markets, putting the needs of the client first, and developing clever alliances. These calculated actions highlight Cashfree's dedication to maintaining its position as the market leader in payment solutions and maximizing value for all parties involved.
Cashfree - FAQs
Who founded Cashfree?
Akash Sinha (CEO) and Reeju Dutta are the founders of Cashfree.
How does Cashfree make money?
Cashfree charges a fee of anywhere between 1.75% and 3% of the value of the transaction.
How much funding has Cashfree raised?
Cashfree has raised a total of USD 42 Mn to date. Its recent funding was led by Y Combinator and APIS growth fund II for USD 35.3 Mn as a Series B round.
What is Cashfree?
Cashfree is a full-stack payments solution. It helps Indian businesses accept and send money. It offers businesses the fastest and most seamless way to collect and disburse payments at scale.
How much is Cashfree's Operating Revenue?
Cashfree operating revenue is around INR 227.33 crores in FY21 and a profit of INR 25.22 crore.
Is Cashfree free?
NO. Cashfree charges a fee of anywhere between 1.75% and 3% of the value of the transaction.
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