B2B fintech startup Vegapay has secured $5.5 million in an equity funding round led by Elevation Capital, with participation from existing investor Eximius Ventures. This follows its initial institutional funding round in 2023, where it raised $1.1 million, also led by Eximius Ventures.
The newly acquired funds will be directed toward enhancing Vegapay’s product suite, focusing on product development and regulatory compliance. A significant portion will also be allocated to hiring software developers, designers, and engineers.
“In the credit card space, there are legacy companies, but most of the banks are not like 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,” said Gaurav Mittal, co-founder and CEO of Vegapay. He highlighted that traditional credit systems used by financial institutions often hinder innovation due to extensive third-party integrations and lengthy development cycles.
Vegapay, founded in 2022 by Gaurav Mittal, Himanshu Agrawal, Puneet Sharma, and Abhinav Garg, aims to streamline these processes for financial institutions, reducing them to one or two days. The company provides a platform that automates solutions such as card management systems, Unified Payments Interface (UPI) on credit lines, UPI on credit cards, and standalone solutions for credit-based programs like origination systems, loan collection systems, and co-lending management systems.
With a team of 55 members, Vegapay is currently collaborating with over six banks, including a major public sector bank, with plans to launch a credit card next month. Additionally, it is introducing a credit line on UPI solution with another private sector bank.
Looking ahead, Vegapay plans to expand its footprint globally, targeting regions such as Southeast Asia and the Middle East. The company projects reaching an annual recurring revenue (ARR) of $2 million by December of next year and intends to become cash flow positive. It also aims to have over 1 million cards in force by the end of next year.
“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,” stated Vaas Bhaskar, principal at Elevation Capital.
Similarly, Softbank-backed fintech startup Zeta, which develops technology backends for banks, has recently launched a stack to support credit line-based transactions on UPI, indicating a growing trend and demand for modernized financial solutions.
Source: The Economic Times
