ToneTag raises up to $10 million from Amazon, Mastercard, others
The start-up facilitates on-delivery payments and peer-to-peer transactions, and works with over 300,000 merchants
New Delhi/Bengaluru: Naffa Innovations Pvt. Ltd, which operates digital payments start-up ToneTag, has raised $8-10 million from a clutch of marquee, strategic investors led by Amazon Inc. and Mastercard, said three people directly aware of the development.
ToneTag’s existing investors include Manipal Global Education chairman Mohandas Pai, PremjiInvest’s chief investment officer T.K. Kurien and Facebook executive Anand Chandrasekaran. The start-up is also in talks with other strategic investors, said the people, requesting anonymity.
ToneTag founder Kumar Abhishek and Amazon did not immediately respond to a request for comment on the funding round.
The start-up enables contactless digital transactions on mobile phones, card swiping machines, automated teller machines and other payment-enabling devices.
It also offers software updates on regular intervals.
ToneTag, which already has an existing partnership with Mastercard, is in the process of integrating its technology, which uses sound waves to transfer data, with the Amazon platform.
The company facilitates on-delivery payments and peer-to-peer transactions, and works with over 300,000 merchants, including Fabindia and Shell petrol pumps, among others.
It has also forged alliances with a number of leading banks and digital wallets, including HDFC Bank Ltd, ICICI Bank Ltd, Freecharge and Airtel.
The companies have integrated their digital applications with ToneTag’s software.
Amazon’s and Mastercard’s bet on ToneTag comes at a time when Google is aggressively pumping money into start-ups and technologies that support Google Assist.
Globally, experts tracking the payments space are expecting sound waves to emerge as the next big thing. California, US-based audio and speech recognition company SoundHound, which uses similar technology, had recently raised $100 million from strategic investors led by China’s Tencent Holdings and Hyundai.
The transaction marks Amazon’s third major venture investment in India in the past six months. It had also bet on online insurance start-up Acko and digital lending start-up Capital Float.
Amazon’s investment in ToneTag also comes at a time when the Seattle-based e-commerce giant is doubling down on its digital payments business globally, especially in strategically important countries such as India, where it has already committed to spend at least $5 billion.
According to recent regulatory filings with the ministry of corporate affairs, Amazon India is preparing to increase its investment in its payments arm by at least five times. It has also increased its authorised capital for Amazon Pay India Pvt. Ltd to Rs2,000 crore ($305 million) from Rs400 crore.
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