State Bank, Clearstone Ventures to invest $7.5m in BillDesk

MUMBAI: US-based venture capital firm Clearstone Ventures along with India’s largest public sector bank State Bank of India has decided to invest $7.5m into Mumbai based payment processing company BillDesk.

This is the second round of funding raised by BillDesk. The first round of investors in the company were SIDBI and Bank of Baroda.

BillDesk has built a network which helps it to work as an interface between different banks and utility companies with a large customer base.

BillDesk aggregates the bills of the customers matching and paying them with the bank it has established interface with. This payment interface covers all kinds of payment options, cheques, ATMs and online payments.

“We have reached a fair amount of maturity in our business model and will use the funding to expand into tier-I and tier-II cities as well as launching new products in the market,” G Srinivasu, director, BillDesk, says.

BillDesk has a payments processing network with 25 of India’s largest banks such as SBI, Citibank, HDFC and leading companies such as LIC, BSNL, Hutchison-Essar, Franklin Templeton, etc.

BillDesk is Clearstone’s first direct investment in India, leading early stage Venture Capital Fund. Rahul Khanna, who heads Clearstone Ventures in India told ET, “We have set up base in India, and are primarily looking at investments in early stage companies in the telecom, media sectors.”

Clearstone Ventures raised a $ 200 m fund in the first quarter of ‘05, the fund has already invested around 30% to 40% of its corpus. The investment into BillDesk is through this fund.

Speaking on the investment, M V Harshey, DGM, State Bank of India said, “This is our first private equity investment in the Indian market. BillDesk has built a leading position in the electronic payments services market in a very short period of time and we are delighted to be a partner in their continued rapid growth and to help them further dominate the market.”