New Delhi: Lightspeed Venture Partners has led a Rs50 crore second round of funding in ItzCash Card Ltd, a multi-purpose pre-paid card company. Exisiting investors Matrix Partners India and Intel Capital also participated in the round.
The funds will be used by ItzCash Card to expand into the retail payment space besides ramping up the product portfolio.
The firm, which is part of the Subhash Chandra-promoted Essel Group, raised $10 million (Rs48.4 crore) from Matrix Partners and Intel Capital in 2007.
Value card and payment firms have attracted funding from other players too. Another funded player in the space is Prizm Payments, which has been backed by Sequoia Capital India. QuikCilver, which offers stored value cards, has also raised funding from Helion Ventures and Accel India.
ItzCash was established in 2004 and has managed to reach an annual gross turnover of Rs1,700 crore. The company offers prepaid cards and cashless payment solutions for individuals and businesses.
The company has tied up with IRCTC for rail booking, Municipal Corporation of Greater Mumbai (MCGM) to facilitate online payment of property tax and water bills, among others.
“We believe there is significant growth potential for this product given that cash accounts for approximately 97% of the country’s retail payments, which exceed $500 billion,” said Bejul Somaia, managing director, Lightspeed Advisory Services India, who will also join the board of ItzCash.
“We have been looking to invest in financial services, especially businesses which are at an intersection of financial services and technology,” he added in an interview.
Reserve Bank of India deputy governor K.C. Chakrabarty said recently that 60% of India’s population does not have access to formal financial services and that only 5.2% of villages have bank branches.
With new funding finalized, ItzCash will also expand to serving the under-banked or unbanked population of India.
“To have a credit or debit card, you need to have a bank account. This (ItzCash card) can be a payment method for people for people who don’t have bank accounts,” said Somaia.