Exclusive: Domestic remittance firm Eko raises external funding after a long gap
Gurugram-based Eko India Financial Services Pvt. Ltd, which provides domestic remittance services, has raised Rs 10 crore ($1.45 million) from US-based impact investor Creation Investments, a person directly in the know told TechCircle.
The development comes seven years after its last publicly known external fundraising round. The company had, in 2011, raised $5.5 million in a round that was led by Creation Investments and included other investors such as Promus Equity Partners.
Previously, Eko had received funding from US-based 4B Capital Fund A and a grant from CGAP Technology Program, which was co-funded by the Bill and Melinda Gates Foundation.
It couldn't be ascertained whether the latest fundraising is part of a larger round. The company's valuation also couldn't be ascertained. In 2016, Eko's founders had injected some capital into the company at an estimated valuation of Rs 126 crore ($19 million), back-of-the-envelope calculations show.
Email queries sent to Eko co-founders Abhishek Sinha and Abhinav Sinha did not elicit a response till the time of publishing this article.
Eko started operations in 2007 as a business correspondent for banks. But it pivoted after a few years to become an independent remittance company. It now lets low- to middle-income people, earning in cash, remit money through their mobile phone. The company ties up with retail partner outlets and uses their network and infrastructure for remittances.
Operational in more than 50 cities, Eko claims to have a network of more than 20,000 retail partners and over 500 distributors on its network. Eko also offers a pre-paid wallet for domestic money transfers; it had launched the offering in August 2015.
In an interaction in June last year, co-founder Abhinav Sinha had said that Eko had started international inward remittances from Nepal and was looking to tap into other countries.
For 2016-17, Eko recorded a 40% rise in revenue to Rs 22.13 crore from Rs 15.82 crore the previous year. Total expenses rose 27% to Rs 29.83 crore while net loss widened to Rs 5.25 crore from Rs 3.60 crore. Its latest financials couldn't be ascertained.
Headquartered in Chicago, Creation Investments was founded in 2007. As per its website, it backs sustainable social ventures in sectors that include agriculture, affordable housing, affordable and accessible healthcare, clean technology, and financial services for the poor.
Besides Eko, its other Indian bets include online lending platform Capital Float, Lucknow-based Sonata Microfinance and Delhi-based Fusion Microfinance Pvt. Ltd.
The fintech sector has become investors' favourite over the past couple of years, thanks to high scope for disruption and innovation and the government's digital push.
In 2017, the sector recorded a four-fold jump in funding to $1.84 billion from $447 million the year before, as per VCCEdge, the data research arm of News Corp VCCircle.
This month alone, at least six other fintech ventures have received funding. ETechAces Marketing & Consulting Pvt. Ltd, the operator of online insurance selling platform PolicyBazaar.com and lending marketplace PaisaBazaar.com, raised $200 million (Rs 1,360 crore) in a round led by SoftBank Vision Fund at a $1 billion valuation.
The other fintech companies that raised funding this week were investment app Sqrrl, trade financing firm Drip Capital, digital lending platform SMEcorner, supply chain financing startup CredAble and mass market mutual fund investment platform Nivesh.com.