ItzCash Card Ltd, the prepaid cash card company that is part of the Essel Group, has received a $10 million private equity (PE) investment from Matrix Partners and Intel Capital.
Matrix Partners India is headed by Avnish Bajaj, the co-founder of Baaze.com, which was acquired by online and shopping website eBay. US-based Intel Capital is the venture capital organisation of Intel Corp and its investments around the world are worth $1.89 billion.
Ashok Goel, chairman, ItzCash Card Ltd, told DNA Money that the funding was necessary to gauge the value of the company. He, however, did not divulge the current value of the company.
“We thought this was the best way (PE funding) because the other alternatives were an IPO or a paid valuation research by companies like KPMG,” Goel said.
When asked about how this funding would be utilised, Goel said: “We plan to use this investment to expand from the online space to the physical space.”
ItzCash Card is a prepaid cash card used to transact through the internet and mobile. Started in 2003, the card is available in denominations ranging from Rs 100 to Rs 10,000. The card can be used to buy things online or through retail outlets that have a tie-up with the company.
The card is used among others for payment of travel, utilities (payment of cable, subscription, electricity, etc) bills, mobile services and shopping.
ItzCash charges between 0% and 25% commission from the merchant company for using its services. In the case of railways, which does not pay commission, the company charges a 1.5% fee from the user.
Goel said his company is targeting the 70% un-banked population of the country. ItzCash currently has 5 million users.
Naveen Surya, executive director, ItzCash Card Ltd, said: “We have around 5,000 franchisees and our card is also available at 100,000 retail outlets.”
The company’s last year’s revenue was Rs 750 crore, which is expected to grow to Rs 1,000 crore this year.
Meanwhile, Intel Capital sees prepaid cards having the potential to usher in similar growth in the Indian online commerce market as in the telecom market, according to Sudheer Kuppam, managing director, Intel Capital India, Japan, Australasia and South-East Asia.
Source: DNA India