CashFlo Set to Acquire LogiTax in Strategic Move to Enter Enterprise Sector

Finance automation and payments platform CashFlo is poised to acquire tax compliance management solution provider LogiTax, sources familiar with the development informed Entrackr.

The acquisition, strategically designed to bolster CashFlo’s entry into the enterprise business sector, marks a significant expansion for the company.

Founded in 2018 by Ankur Bhageria and Dushyant Agarwal, CashFlo specializes in providing short-term capital access for vendors, aiding corporations in optimizing their working capital flow, and enhancing their topline through efficient supply chain finance management. The company’s efforts have garnered substantial investor confidence, with a notable funding round in September 2022, where CashFlo secured nearly $9 million. This round was led by General Catalyst, with participation from existing investor Elevation Capital, bringing its total fundraising to over $12 million.

LogiTax, established in Pune in 2017 by Aditya Kulkarni, offers an end-to-end tax compliance management solution. Its platform facilitates GST filings, auto-validates invoicing data, generates e-invoices, and ensures data remains audit-ready. Tailored for ERP partners, SMEs, and corporations, LogiTax competes with notable players like Clear (formerly Cleartax), Treflo, myGSTcafe, myBillBook, and Vyapar. Despite the competitive landscape, LogiTax has successfully carved out a niche for itself in the tax compliance space.

Sources indicate that a term sheet has been signed, with an official announcement expected soon. Following the acquisition, Aditya Kulkarni will spearhead CashFlo’s enterprise business, leveraging LogiTax’s expertise and client base.

While both companies have refrained from commenting on the acquisition, their financial performance in FY23 offers insights into their trajectories. CashFlo reported a twofold increase in operating revenue to Rs 4.73 crore, despite incurring losses of Rs 21.52 crore, reflecting its aggressive growth strategy. On the other hand, LogiTax recorded Rs 2.12 crore in revenue with Rs 12.34 lakh in losses. Both companies have yet to file their FY24 financials, which will provide a clearer picture of their financial health post-acquisition.