The payments bet: finding the transaction that was still broken

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Payments is an interesting category in India because, at one level, you could argue that the problem is largely solved.
UPI has made moving money incredibly easy. Consumers are comfortable paying digitally. Merchants across the country accept digital payments. India has built one of the best payments infrastructures anywhere in the world.
So the question for us was never really, what is the next generic payments company?
It was more often, where is the transaction still broken?
Because once you start looking at payments inside specific industries and specific use cases, you realize that there are still a lot of places where moving money is cumbersome, expensive, opaque or simply not designed around the experience the user actually needs.
That became an interesting area for us at Better Capital.
Skydo is probably one of the clearest examples.
If you are an Indian company or freelancer getting paid by customers outside India, the experience historically has been surprisingly cumbersome. There are bank wires, foreign exchange markups, compliance requirements, documentation and often very little transparency around what you are actually paying.
The problem was not that there was no way to receive money internationally. Of course there was.
The problem was that the experience was nowhere close to what you would expect from a modern financial product.
Skydo essentially started there. Make getting paid by a global customer feel almost as simple as getting paid locally. Give the business transparency on foreign exchange, make the compliance and documentation easier, and take away a lot of the friction that had simply been accepted as part of cross border payments.
Today, Skydo is authorised under the RBI’s cross border payment aggregator framework and is used by tens of thousands of Indian businesses and freelancers.
What I like about the Skydo example is that it was not payments for the sake of payments. There was a very specific customer with a very specific transaction that was broken, and payments happened to sit right at the center of solving it.
Vendekin came from a completely different direction.
When Aroon started Vendekin, vending machines were still largely built around an older world of cash and fairly dumb hardware. But if unattended retail was going to become much larger, the entire transaction needed to become digital.
Vendekin initially built a mobile payment system for vending machines and then kept building around the problem. Once you digitize the payment, you can digitize the machine, the inventory, the operations and eventually the entire unattended retail experience. That is essentially what the company has evolved into today.
Again, payments was not really the end product. It was the unlock.
Driffle is another example that I find quite interesting because you would not necessarily look at it and say this is a payments company.
Driffle is a marketplace for gaming and digital goods. But when you try to build a global marketplace like that, the transaction itself becomes a big part of the problem.
A buyer might be in one country, the seller in another. There are different currencies, different payment methods, different preferences in different markets, digital delivery and the question of how and when sellers get paid. Driffle has had to build around all of that to make the marketplace work. Its current marketplace structure handles payments between users and vendors and has its own settlement flows around those transactions.
So while the consumer sees a gaming marketplace, a meaningful part of what makes that experience possible sits underneath in payments and transaction infrastructure.\We have explored this thesis in several other ways over the years as well.
Shopflo was an early investment around checkout. The insight there was that accepting a payment and creating a great checkout experience are not really separate things. If the customer drops off before completing the transaction, it does not matter how good your payment infrastructure is.
So Shopflo focused on making checkout dramatically better for online merchants and eventually became part of Pine Labs. The acquisition brought together Shopflo’s checkout layer with Pine Labs’ broader payments infrastructure.
Inai came from yet another direction. As internet businesses expanded globally, they ended up dealing with multiple payment gateways, payment methods, routing, failed transactions, reconciliation and a lot of complexity underneath what looks to the customer like a simple payment.
Inai built software around managing and optimizing that complexity. It was acquired by Chargebee, where that technology is now part of a much broader payments and revenue stack.
Both Shopflo and Inai were acquired relatively early in their journeys, so we never really got to see how large they might have become as independent companies. But both came from the same broad way of looking at the market. Find an important transaction that does not work well enough and build around it.
And, of course, not every attempt worked.
Bon was one of our earlier investments around financial services and payments for gig workers, particularly drivers. The thesis made sense to us. Gig workers were becoming a large new segment, their financial lives looked quite different from salaried employees, and payments sat right in the middle of their work.
The company did not make it.
Nucleon has been another attempt, this time around healthcare, where payments, insurance, hospital workflows and financing can come together in a fairly complicated way. It is a hard problem and the company is still trying to figure out the right way to solve it.
I actually think these examples matter when looking back at an investing thesis.
Early stage conviction investing is not about forming a thesis and then watching every company you back prove it right. That is obviously not how it works.
You develop a view about where there is an important problem or change happening. You meet founders approaching that opportunity from completely different directions. You back some of them very early, often when neither you nor they know exactly how the company will evolve.
Some become large companies. Some get acquired along the way. Some keep working through the problem for years. And some simply do not work.
That is the nature of it.
What you are really testing over time is whether the underlying observation was useful.
And the observation for us around payments has remained fairly consistent.
The generic act of moving money has become dramatically easier in India. That is an incredible foundation, but it does not mean every payment experience has been solved.
Cross border business payments are different from paying at a kirana store. A global gaming marketplace has very different transaction problems from an Indian consumer using UPI. An unattended vending machine has a different set of requirements again. Checkout, payment orchestration, healthcare and gig work each introduce their own complexity.
That is where I think a lot of the interesting opportunities continue to sit.
Not in building another way to pay.
In finding the transaction that is still broken, understanding why it is broken, and building the experience around fixing it.
Sometimes that becomes a payments company.
Sometimes payments simply becomes the layer that makes a completely different business possible.
Both can be very interesting.
The fifth and final part of a five-part series by Vaibhav Domkundwar examines the payments thesis behind investments in Skydo, Vendekin, Driffle, Shopflo, Inai, Bon, and Nucleon. The piece explores how Better Capital looked beyond generic payments to identify specific transactions that remained broken across cross-border payments, unattended retail, gaming, checkout, healthcare, and gig work. It also highlights how payments can either become the core product or serve as the infrastructure enabling a larger business.

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