Suvidhaa Infoserve has raised $7 million in its second round of funding from new investor, IFC, and returning investors, Norwest Venture Partners (NVP) and Reliance Venture Asset Management (RVAM). Suvidhaa ties up with retail outlets to provide them the ability to enable services like air, railway and bus ticketing, mobile recharges, insurance payments, hotels, movie ticketing and utility bill payments. Its network of Suvidhaa Points consists of Kirana Stores, pharmacies, STD booths, Cyber Cafes, Travel Agents, among others. At the back end of this business are digital enabled services which allow for a lower cost of distribution, as well as a wider reach.
Suvidhaa plans to use the funds to broaden its portfolio of consumer service offerings, and look to expand its market presence in neighborhood stores across India. In two years, it claims to have increased its distribution to 25,000 neighborhood stores in around 500 cities and towns across India, from 1300 when the first round of investment was raised two years ago.
What Suvidhaa hasn’t done is get into the digital payments space with a pre-paid payments service, like OxiCash from Microsoft funded Oxigen and Itz Cash (funded by Matrix Partners, Lightspeed and Intel Capital) have done, aggregating services on top of their payment services. In an interview with DealCurry, Paresh Rajde, MD & CEO of Suvidhaa says that they are primarily an aggregator of services and not a payment gateway, adding that their users don’t want the hassle of owning and operating technology. Dealcurry adds that 2008-09 figures for Suvidhaa show Rs. 91 crore in transactions, revenues of Rs. 5.5 crore, and margins of around 1-2%, and a Rs. 16 crore cumulative loss. Suvidhaa expects to break even by 2012, and go in for an IPO in 2014. Read the interview here.