MSwipe looks for a lifeline as it runs out of cash

Covid-19 has impacted businesses in a big way. While companies that have the runway are waiting for normalcy, those who are left with just a few months of cash in the bank are looking to consolidate. After travel and hospitality, the point of sales (POS) business has been hit hard and MSwipe is on the block, scouting for a home. 

According to three Entrackr sources, Mswipe is looking to get bought out as it is left with just a few months of runway. “MSwipe has been approaching several companies including Pine Labs, Paytm, BharatPe, Razorpay and others to get acquired,” said one of the sources on condition of anonymity. “It is left with 3-4 months of runway. Their existing investors are unlikely to put in follow on capital.”

MSwipe’s existing investors include Falcon Edge, B Capital Asia, Epiq Capital and Matrix Partners. 

The struggle of MSwipe comes at a time when the POS ecosystem in India has been under stress due to a Covid-19 induced nationwide lockdown. The business in this space is almost at a standstill.

The sources further added that MSwipe is seeking a buyout for about $200 million. “It’s unlikely that someone will pay such an amount when everybody is trying to conserve cash and extend the runway of their companies,” added the second source who too requested not to be named.

Founded in 2011, Mswipe is an independent merchant acquirer and payment services provider that makes mobile PoS (mPOS) devices for merchants.

It also has a payment gateway for processing payments online and an automated payment settlement system for merchants via UPI, Google Pay, PhonePe, Bharat QR and BHIM.

Several media reports in the past have hinted that the company was valued around $450 million (post-money) in the last financing round. In March 2019, MSwipe had raised Rs 220 crore worth Series E round from Falcon Edge, Facebook Co-founder Eduardo Saverin’s B Capital Asia, Epiq Capital and DSG Consumer Partners.

“Talks with the aforementioned companies are at an early stage without any surety about the transaction,” said the above-quoted person.

Entrackr queries sent to MSwipe, Razorpay, and Paytm remained unanswered at the time of publishing this story. We will update the post as and when they respond.

MSwipe isn’t the only company seeking a buyout. At present, there are many companies across sectors that have less than a year of runway and are talking to bigger companies for potential consolidation. Well-funded companies are also eyeing synergies as the road ahead is unclear around the impact of the ongoing Covid-19 crisis. Zomato and Grofers were also in talks to merge.

Entrackr had exclusively reported the potential talk between the two firms.

“Besides Covid-19, Facebook’s investment in Jio platforms has created a kind of panic in scaled consumer internet as well as B2B companies. We are bound to see plenty of consolidation across e-commerce, payments, and several other segments,” said a partner of a growth stage venture capital, requesting anonymity.

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Written by Jai Vardhan


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