Castler, an escrow banking platform, has successfully raised $5 million in a Pre-Series A funding round led by Capital 2B (an Info Edge fund) and IIFL Fintech Fund. Other participants in the round included Stride Ventures and Piper Serica, along with returning investors Zerodha, Venture Catalysts, 9Unicorns, and FAAD Network.
The newly acquired funds will be utilized by Castler to expand its escrow product portfolio and strengthen its domestic and global businesses. The company aims to establish partnerships with 25 banks and achieve a tenfold growth in its operations within the next few years.
Founded in 2021 by Dinesh Kumar, Vineet Kumar Singh, and Vineet Singh, Castler acts as a mediator between banks and enterprises through its Escrow Banking Stack. The platform addresses various challenges faced by businesses, including evolving business models, complex transaction flows, source of funds, identity verification, fraud management, and customer-consumer protection.
Castler currently has affiliations with ten banking partners, providing escrow services to over 500 enterprises and managing transactions exceeding INR 5000 crore each month.
Vineet Singh, the Co-founder and CEO of Castler, expressed his gratitude for the funds raised, stating, “Trust is the most valuable digital currency, and Castler is focused on establishing itself as the epitome of Trust-as-a-Service. Our remarkable growth, achieved with a small team of 20 individuals, exemplifies the strength and capabilities of our unique digital escrow product.”
Prior to this funding round, Castler had already secured $1.5 million from investors such as Zerodha, Venture Catalysts, 9Unicorns, FAAD Network, Lets Venture, and AngelList.
The founders are committed to operating the startup based on principles of good governance and responsible execution. To support their growth ambitions, Castler recently appointed Kumar Amit, former Vice President of Razorpay, as the Co-founder and Chief Operating Officer.
The Indian fintech sector experienced growth in the digital lending business during 2022. Alok Mittal, the Co-founder and CEO of Indifi, emphasized the potential of collaboration between banks and fintech players to enhance credit access for underserved segments and small and medium-sized enterprises (SMEs). Currently, banks dominate 75% of MSME lending in the country.
Overall, the Indian fintech startup ecosystem has been rapidly expanding its cross-border operations, driven by initiatives like the National Payments Corporation of India (NPCI) promoting the acceptance of UPI services in foreign countries. Recently, Paytm announced plans to launch UPI International and facilitate international transactions on its platform.
According to Inc42, the Indian fintech market is projected to reach a value of $2.1 trillion by 2030, with digital lending emerging as the fastest-growing sector.
