Existing investor Y Combinator also participated in the funding round.
"With our Series B funding round of $35 million led by Apis Growth Fund II, we plan to utilise this fresh capital to further scale Cashfree's payments solutions, developing innovative products and strategic acquisitions," Akash Sinha, Co-Founder and CEO, Cashfree, told IANS.
"Our renewed focus is on strengthening the fintech infrastructure by ensuring that the framework can seamlessly support the unprecedented higher volumes of digital payments. This investment comes at a crucial time with the recent surge in digital payments," Sinha said.
Cashfree was founded by Sinha and Reeju Datta in 2015 and processes online payments for thousands of Indian businesses.
The company is a 2017 alumnus of Y Combinator, the start-up incubator based in San Francisco, and has grown exponentially, processing over $12 billion annualised payment volumes as of March 2020.
Cashfree said it has been profitable since its first year of operations and counts more than 50,000 businesses amongst its merchants including leading internet companies such as Cred, BigBasket, Zomato, HDFC Ergo, Ixigo, Acko, Zoomcar, and Delhivery, among others.
One of the key growth drivers for Cashfree is its bulk disbursal solution -- Payouts -- that was launched in 2016 and grew quickly to 1 lakh daily transactions within a year.
Payouts helps businesses send money instantly to bank accounts, cards, UPI, and wallets with a simple integration.
Use cases for Payouts include vendor payouts, wage payouts, e-commerce refunds, insurance claims processing, loan disbursements, expense reimbursements, loyalty, and rewards payments.
In addition to Payouts, Cashfree's Payment Gateway supports payments from more than 100 payment channels -- including debit / credit cards, RuPay, UPI, bank transfers, wallets and various instalment options.
Cashfree said that the investment will also assist the company in making selective bolt-on acquisitions to further augment its geographic and product reach.
"We will be investing substantially in next-gen payments as well as banking technologies for businesses to easily deploy digital payments at scale," Sinha said.
Apis Growth Fund II is managed by Apis Partners LLP.
Joining Cashfree as a board member, Udayan Goyal, Managing Partner and