The company announced plans to allocate the raised capital towards expanding its product and technology teams, as well as investing in operational and compliance necessities.

Gaurav Mittal, the CEO of Vegapay, explained during a conversation with Business Standard that their intention is to promptly onboard additional engineering and technical personnel, with ongoing recruitment as needed. He emphasized the allocation of funds towards team development, operations, and regulatory compliance, particularly given the nature of their banking products.

Previously, in 2023, Vegapay had secured $1.1 million in a pre-seed funding round led by Eximius Ventures. Other contributors included DS P HMK, Capri Global, Upsparks Capital, MGA Ventures, and Climber Capital.

Vegapay specializes in offering digital lending and credit card management solutions to various financial institutions, including banks, non-banking financial companies (NBFCs), and fintech companies.

Their services encompass automated solutions such as card management systems, UPI-based credit lines, UPI-based credit card management, as well as standalone modules catering to credit-based programs such as origination systems, loan collection systems, and co-lending management systems.

Essentially, Vegapay functions as a technology service provider (TSP) for financial institutions, offering them a range of tech solutions.

The TSP segment within the broader fintech ecosystem has been gaining traction among investors. Vaas Bhaskar, a Principal at Elevation Capital, expressed confidence in the potential of TSPs, suggesting that success in India could pave the way for global expansion. He noted that recent investments by their firm reflected a balanced interest in both TSPs and other models.