The landscape of cross-border business-to-business (B2B) payments is poised for disruption, as Indian fintech startup Xflow has secured $16.6 million in Series A funding. Led by General Catalyst, the round includes participation from existing investors like Stripe and Lightspeed, alongside a new investment from PayPal Ventures. This infusion of capital signals strong confidence in Xflow’s mission to streamline international transactions for Indian businesses, a sector historically hampered by slow processing times and opaque fees. The funding values Xflow at $85 million post-investment, bringing the total raised to date to over $32 million.
For Indian exporters, navigating the complexities of international payments has long been a significant challenge. Despite the rapid adoption of digital payment solutions domestically, such as the Unified Payments Interface (UPI), cross-border B2B transfers often remain reliant on traditional banking infrastructure. This reliance frequently results in limited transparency regarding fees, unpredictable settlement timelines, and uncertainty about the final amount received in Indian rupees. This friction is particularly acute for larger exporters who require to efficiently move substantial funds into India to cover operational costs, including salaries. Xflow aims to address these pain points by offering a more transparent and efficient alternative, leveraging technology to accelerate the flow of capital.
Founded in 2021, Xflow provides a comprehensive payment infrastructure designed to facilitate cross-border transactions for a diverse range of businesses, including exporters, software-as-a-service (SaaS) companies, platforms, and freelancers. The company’s platform enables businesses to seamlessly collect international payments, manage foreign exchange, and settle funds directly in India. Xflow’s approach centers on providing Application Programming Interfaces (APIs) that allow businesses to integrate cross-border payment capabilities directly into their existing systems, rather than requiring them to adopt a separate payment application.
Addressing a Critical Need in the Indian Market
The need for a solution like Xflow stems from the inefficiencies inherent in traditional cross-border payment systems. According to co-founder Anand Balaji, who previously contributed to Stripe’s expansion in India, “Cross-border B2B payments were stuck in a different age compared to UPI.” UPI has revolutionized domestic payments in India with its instant transfer capabilities, but that same speed and convenience have not been readily available for international transactions. Balaji, along with co-founders Ashwin Bhatnagar and Abhijit Chandrasekaran – both former Stripe colleagues – identified a significant opportunity to modernize this process. The team recognized that Indian businesses were underserved by existing solutions and sought to build a platform that would provide greater control, transparency, and speed.
Xflow’s growth trajectory demonstrates the demand for its services. The company reported processing close to $1 billion in annualized cross-border payment volume last year, representing a tenfold increase compared to the same period in 2024, according to Balaji. This growth has been accompanied by an expanding customer base, which now includes approximately 15,000 businesses. These customers span a variety of sectors, including SaaS firms, global capability centers (offshore units operated by multinational corporations in India), IT services exporters, freelancers, and other fintech platforms.
A Tiered Approach to Transaction Sizes
Xflow’s customer base exhibits varying transaction sizes depending on the type of business. Global capability centers, for example, typically process transactions ranging from $1 million to $2 million, while goods exporters average between $30,000 and $40,000 per transaction. Freelancers, generally handle smaller amounts, around $3,000 per transaction. This tiered structure highlights the broad applicability of Xflow’s platform across different segments of the Indian economy. The company’s focus on providing infrastructure rather than a direct-to-consumer application allows it to cater to a wide range of needs and integrate seamlessly into existing workflows.
Balaji emphasizes that Xflow’s vision extends beyond simply replicating the functionality of existing players like Wise. “We didn’t want to build the next Wise — we want to power the next thousand Wises,” he stated, underscoring the company’s ambition to turn into a foundational layer for cross-border payments, enabling other businesses to build their own innovative solutions on top of its infrastructure. This strategy positions Xflow as a key enabler of financial technology innovation in India, and beyond.
Leveraging AI for Foreign Exchange Optimization
In addition to its core payment infrastructure, Xflow has introduced an artificial intelligence (AI)-powered foreign exchange (FX) tool designed to help businesses optimize their currency conversions. This tool allows finance teams to set target conversion rates, rather than accepting the prevailing rates offered by banks. Balaji likened this feature to “limit orders” used in financial trading, where instructions are given to buy or sell only at a specified price. The AI model analyzes market data to predict future exchange rate movements, providing businesses with the opportunity to secure more favorable rates.
According to Xflow, the AI model currently provides a three-day forecast with approximately 92% confidence. However, it’s critical to note that TechCrunch reported they were unable to independently verify this claim. The company states that this feature has already generated incremental gains for some customers through data-driven FX decisions. This demonstrates Xflow’s commitment to providing value-added services that go beyond simply processing payments.
Competition and Future Expansion
Xflow operates in a competitive landscape, facing competition from established banks that continue to dominate large-value cross-border B2B transfers, as well as fintech companies like Wise, Payoneer, and Skydo, which cater to smaller transactions. However, Xflow differentiates itself through its focus on high-value transactions and its API-led infrastructure. This approach allows it to serve a niche market that is often underserved by traditional solutions.
The company plans to utilize the newly acquired funding to expand its product offerings and secure regulatory licenses in new markets. Xflow is currently preparing to launch import capabilities in the coming months and is actively pursuing licenses in Singapore. The company already holds a payments license in Canada, demonstrating its commitment to international expansion. Despite its global ambitions, India remains Xflow’s primary market, and the company will continue to invest heavily in serving the needs of Indian businesses.
Regulatory Approvals and Partnerships
Xflow has made significant strides in securing regulatory approvals, recently receiving final authorization from the Reserve Bank of India (RBI) for a Payment Aggregator–Cross Border (PA-CB) license covering both exports and imports. This license is crucial for enabling Xflow to operate legally and efficiently in the Indian market. The company has also forged strategic partnerships with Easebuzz and Drip Capital to embed its cross-border capabilities into their respective platforms. These partnerships will expand Xflow’s reach and provide its services to a wider audience.
The backing of industry giants like Stripe and PayPal Ventures is expected to further strengthen Xflow’s credibility with banking partners and regulatory bodies. Balaji noted that this support has been instrumental in building trust and facilitating collaborations. As Xflow continues to scale its operations, it will likely leverage these relationships to navigate the complex regulatory landscape and expand its global footprint.
Currently, Xflow employs approximately 65 people as it continues to build out its cross-border infrastructure business. The company’s rapid growth and ambitious plans suggest that it will likely continue to expand its team in the coming months and years.
Key Takeaways:
- Xflow has secured $16.6 million in Series A funding to streamline cross-border B2B payments for Indian businesses.
- The company’s platform offers greater transparency, speed, and control compared to traditional banking methods.
- Xflow’s AI-powered FX tool helps businesses optimize currency conversions and potentially reduce costs.
- The company is expanding its product offerings and pursuing regulatory licenses in new markets, with a continued focus on India.
Looking ahead, Xflow is poised to play a significant role in shaping the future of cross-border payments for Indian businesses. The company’s innovative approach, coupled with its strong backing from industry leaders, positions it for continued growth and success. The next key milestone for Xflow will be the rollout of its import capabilities in the coming months, followed by its pursuit of licenses in Singapore and other international markets.
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