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Citrus Pay confirms $2 million funding from Sequoia Capital; Mohit Bhatnagar on board

Reports of Sequoia capital’s investment in Citrus Pay, in mid 2012 was confirmed today at a press meeting. The meet was presided by Mohit Bhatnagar, MD Sequoia Capital, who is on the Citrus Pay’s board, and the founders, Satyen V Kothari and Jitendra Gupta. Satyen is a Silicon Valley veteran who’s worked at Citruscorporations like Apple and has had experience consulting for industry biggies like Intuit. Jitendra on the other hand, brings vast experience from the banking sector with his stint with ICICI Bank and has handled various verticals there.

SequoiaThe agenda was to introduce Citrus Pay’s offerings and benefits to a select group of media personnel. Apart from this, the hosts also confirmed the investment, revealing the $2 million ticket size in what was their first institutional round.

Building on a great heritage of investments in Payment Solutions

Mohit Bhatnagar first addressed the gathering and spoke about the rich heritage of payment based investments that Sequoia capital has made over the past decade. He said, “We were one of the earliest investors in Paypal, which turned out to give us great returns. After the exit, we convinced Roelof Botha to join us, to help us make more investments in the payment sector. Ever since, we’ve made investments in many innovative companies like Square, Greendot etc, in the US.”

Outside of the US, Sequoia’s payment solutions portfolio includes the likes of Europe based Klarna and China based Alipay. “I believe that payments in India is broken – firstly because of the high drop rates of online transactions and there are just too many steps that a user has to go through before making an online payment. Citrus marries these two problems into one great solution, with a strong focus on a great user experience. By doing so, Citrus has a great chance of replicating the success of Alipay or even Paypal for that matter, in India. ” he added.

This is Sequoia’s first investment in an Indian online payments solution; It has made 2 investments in Indian POS companies namely, Pine Labs and Prizm Payments.

Building a strong engineering complimented with great user experience

According to Jitendra, co-founder, Citrus Pay, the aim is to fix India’s online payment problem in two ways. Firstly, it aims to reduce the drop off rate through partners and engineering. He said, “We are the only company in India to tie up with more that 5 payment gateways, which gives the merchant a lot more to choose from. Once chosen, the technology automatically sniffs for a payment gateway that is down and uses another one, thereby significantly reducing the failure rate for online payments.”

The second way is by providing a seamless user experience – “when a user registers on Citrus Pay, there are host of benefits that they receive. For example, after registering for the next time you use a Citrus Pay checkout, it will fill out your details on all the necessary fields, leaving you to only validate the transactions using your CVV and security password.”

“Here’s another instance – when your payment is about to fail, Citrus will suggest you other payment methods that you might have used in the past, so as to reduce the drop rate. If all else fails, it will even suggest you COD.”

Usage across devices and Merchant Delight

Along with addressing some burning issues on the customer front, perhaps Citrus Pay’s greatest asset lies in its compatibility with mobile devices. Satyen said, “For most merchants, dealing with payments is a problem. Along with facing integration problems with the Bank’s systems, the sheer number of mobile devices with different form factors that is coming out today is an added headache for the merchants.”

“To counter this, we cater for all mobile devices as well. Once a merchant signs up with us, they can have their branded payment pages across all devices.”

Satyen estimates a $20 billion valuation for payments solutions in India and predicts that it will grow to as much as $50 billion in the coming years. Satyen also predicts an upsurge in online payments from tier 2 and tier 3 cities in the coming years.

Market and future plans

Citrus Pay has acquired over 550 merchants over the past 13 months and records up to 11,000 transactions per day. In a conversation after the meeting, Satyen said, “You know, we wanted to build a good traction before we publicly announced the funding. It’s easy to say that we’re going to do something thing. Doing it first gives us more credibility and that’s what we’ve done.”

While they are currently targeting India as a market, the founders and Mohit have revealed intentions of going global. When asked about the markets that excite them, Satyen said, “It’s probably too early to talk about it, but if we were going international, then South East Asian countries like singapore and Malaysia are an interesting prospect. Japan and Australia also seem interesting.”

The current investment of $2 million will be used on personnel and technology. The current team size is 35 and is based out of Mumbai and Pune.