Employees work at a startup office in New Delhi (Photographer: Sara Hylton/Bloomberg)

ItzCash Raises $120 Million From U.S.-Based Ebix; Matrix, Intel And Lightspeed Check Out

Financial technology company ItzCash has raised $120 million (around Rs 778 crore) from U.S.-based software firm Ebix Inc. as a demonetisation-induced boost continues to help digital payments companies attract big checks.

Nasdaq-listed Ebix has acquired 80 percent stake, valuing ItzCash at $225-270 million, Naveen Surya, managing director of ItzCash, told BloombergQuint over the phone. Ebix will pay $76 million of cash upfront and a contingent earn-out of up to $44 million payable over three years from closing.

While Matrix, Intel Capital and Lightspeed Venture Partners exited ItzCash, Essel Group will own the remaining 20 percent stake.

Investors sense an opportunity as the government continues to push cash-less transactions after Prime Minister Narendra Modi’s decision to scrap old high-value notes last November led to a spike in digital payments. Last week, Paytm raised $1.4 billion from SoftBank Group Corp. in the largest funding round from a single investor. Earlier this month, Bloomberg reported that Mobikwik is set to raise more than $100 million from Blackrock Inc valuing the digital wallet at $1 billion.

Ebix has become the latest entrant in the country’s expanding digital payments market. It is a global supplier of on-demand software and e-commerce services to insurance, financial, e-governance and healthcare industries.

“Ebix’s global reach and operations opens International expansion opportunities for ItzCash. We are keen to replicate our proven model, technology platform and operating experience to other emerging markets for financial services,” Surya said in a statement. The company will deepen its foray in credit, insurance, healthcare and investments, and will invest in distribution network and technology to provide a fully integrated financial exchange, he said.

Founded in 2006, ItzCash, which had raised about $51 million from Matrix Partners, Intel Capital and Lightspeed prior to the latest funding, turned profitable in FY17. It started with a prepaid card and wallet products, and has expanded into remittances, financial services and corporate products. The company also offers cloud-based solutions at about 75,000 stores across 3,000 cities and towns, enabling kirana stores to make bill payments and money transfers.

Also Read: Digital Payment Users Jumped Over 60% Since Demonetisation, Says NPCI