Monday, July 15, 2024

Vegapay Raises $5.5 Million in an Equity Funding Round

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Vegapay, a business-to-business (B2B) focused fintech startup, has secured $5.5 million in an equity funding round. This round was led by Elevation Capital, with additional support from existing investor Eximius Ventures. Prior to this, Vegapay raised $1.1 million in 2023, led by Eximius Ventures.

What Does Vegapay Do?

Founded in 2022 by Gaurav Mittal, Himanshu Agrawal, Puneet Sharma, and Abhinav Garg, Vegapay provides digital lending and card management solutions. The startup helps financial institutions, such as banks and Non-Banking Financial Companies (NBFCs), launch and manage customizable credit programs. Vegapay’s platform automates various solutions, including card management systems, Unified Payments Interface (UPI) on credit lines, and other credit-based programs like origination and loan collection systems.

Focus on Product Enhancement

The new funding will be used to enhance Vegapay’s product suite, focusing on product development and regulatory compliance. A significant portion of the funds will be allocated to hiring top-tier software developers, designers, and engineers to drive innovation. This investment aims to help financial institutions streamline their processes, reducing the time required to implement new credit solutions from months to just a few days.

Vegapay raises $5.5 million funding

Global Expansion Plans

Vegapay plans to expand globally, targeting regions such as Southeast Asia and the Middle East. The startup aims to reach an annual recurring revenue (ARR) of $2 million by December next year and become cash flow positive. Additionally, Vegapay intends to have over 1 million cards in force by the end of next year. The company is already working with over six banks, including a major public sector bank to launch a credit card next month and introducing a credit line on UPI solution with another private sector bank.

Leadership Comments

Gaurav Mittal, co-founder and CEO of Vegapay, emphasized the startup’s mission to address the core challenges banks face in offering credit cards and other credit products. “In the credit card space, there are legacy companies, but most of the banks are not liking it for obvious reasons, and therefore new-age players like us are solving the core pain for a bank to offer credit cards or any credit products,” Mittal said.

Vaas Bhaskar, Principal at Elevation Capital, highlighted the accelerating demand for modern credit platforms among financial institutions. “Financial institutions’ demand for modern credit platforms is accelerating at an unprecedented scale. These modern systems will form the foundation of all innovations by banks and credit providers. We see great potential in Vegapay’s solutions to fill this void,” Bhaskar stated.

This funding marks a significant step for Vegapay as it continues to grow and expand its innovative solutions in the fintech industry.

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