CashKaro, one of India’s premier cashback and coupon sites, will expand its e-commerce service offering after raising $ 10 million in Series B funds, the New Delhi-based startup announced today. The round was chaired by Korea Investment Partners with the participation of returning investor Kalaari Capital.
TechCrunch last covered CashKaro five years ago when it racked up a Series A valued at $ 3.8 million. The final round brings the company’s total funding to $ 15 million.
Over the past five years, the company has launched new products including a price comparison service and EarnKaro, a social commerce cashback app that launched about 18 months ago. Part of Series B is used to expand EarnKaro, which has approximately one million registered users. It allows social commerce sellers or people who use social media platforms and messaging apps like WhatsApp to sell items and make extra money by creating affiliate links to major ecommerce websites like Amazon and Flipkart. The launch of EarnKaro also allowed CashKaro to enter smaller towns and rural areas, where shoppers often prefer to order from people whose recommendations they trust (i.e., “micro-influencers”) than from ecommerce websites.
CashKaro was founded in 2013 by the couple Swati and Rohan Bhargava and currently has around five million users. The company has partnerships with 1,500+ ecommerce websites including some of the biggest players in India like Amazon, Flipkart, Myntra and Ajio. The company monetizes by charging brands a commission for transactions made through CashKaro links. With the commissions, CashKaro can also return cash to buyers, which can be deposited into their bank accounts or redeemed as gift certificates for Flipkart and Amazon. According to the founders of CashKaro, there are currently more than a million monthly transactions processed.
CashKaro competes for the attention of online shoppers with a variety of other coupon and cashback services in India. Some of its rivals are CouponDunia, GrabOn, and GoPaisa.
“We are the only VC funded cashback site in India. Capital itself isn’t the differentiator, but it’s what we were able to achieve with that capital that sets us apart, ”Bhargava told TechCrunch, adding that CashKaro’s cashback rates are among the highest on the market.
“Given that we now drive nearly half a billion dollars in GMV to our partner locations through CashKaro and EarnKaro, we can receive higher commission rates from partner locations, which in turn helps us achieve the greatest benefit for our members.”
While COVID-19 has affected e-commerce businesses around the world due to sudden changes in consumer habits, the situation in India was particularly complicated in April and May as there were safety zones across the country and deliveries of non-essential items in some zones were only allowed in May.
“COVID-19 took us by surprise and Indian e-commerce was not ready to handle the surge in demand, nor did we expect so many supply and delivery problems,” Bhargava said. “Given that CashKaro works with all of the e-commerce websites, we’ve seen these trends too.”
However, since June sales have been recovering and growing as people continue to stay at home and shop online.
“Our business is growing month by month and indeed the pandemic has spurred our expansion into new digital categories such as education, games and online video streaming that have seen exponential growth,” added Bhargava. Sales of electronics, household and kitchen items, personal care and beauty have also increased in recent months.
At the same time, the economic impact of the pandemic has led more people to seek cashback offers and other money-saving offers.
“We are seeing that there is increased awareness among online shoppers and people are finding services like CashKaro and EarnKaro more useful than ever,” said Bhargava. “On the customer side, our partners like Amazon, Myntra and Ajio are also working more closely with us as they believe our performance marketing model is the perfect way to scale while keeping profitability in mind during these difficult times to keep.”
The new capital round will be used for the goal of CashKaro to double the registered membership base from the current 5 million in the next 12 months. Bhargava told TechCrunch that the cashback offering will be expanded to include categories like credit cards and education, and new marketing campaigns will be launched that will focus on events like upcoming festivals and the Indian Premier League season which kicks off this weekend.
The company is also “aggressively growing for EarnKaro, reaching more influencers, resellers, housewives and students who are our primary target market for this product,” she added. Finally, part of Series B is used for recruitment, including managerial positions.
For Korea Investment Partners, one of the largest South Korean venture capital firms, CashKaro offers the opportunity to enter India’s fast-growing e-commerce market. In a statement, managing partner Hudson Kyung-sik Ho said, “We believe this is a highly scalable opportunity and both Swati and Rohan have put it on a really exciting growth path. CashKaro and EarnKaro have shown exceptional unit metrics together and we are very excited to be part of the Indian partner story. “