Chennai: Chennai-based provider of Rural ATMs, Vortex Engineering, has raised $7 million in funding, led by Tata Capital and Aavishkaar; as a part of Vortex’s planned round of $9.5 million. The funding also saw participation from the existing investors Bamboo Finance and Venture East. The funds would be used to expand the capacity in terms of increasing the number of ATMs manufactures, as well as expand the coverage to more areas.  The investment saw Spark Capital donning the role of exclusive advisor. The company previously had raised seed funding from Venture East and Aavishkaar in 2006; and an investment by Bamboo Finance in 2008 and 2009.

L. Kannan, Founder and CTO, Vortex Engineering says, “A lot of the non-metro urban, semi-urban, and rural areas still do not have ATMs. This is our primary area of focus, as we know the market best, and our technology is most suited for this segment. There is good interest among VCs in our company as it is in a high growth potential market.”

Vortex was founded in 2001 by Kannan, and aims to provide ATMs and associated technologies for the rural and semi-urban areas. The company is changing the face of banking with its Gramateller ATMs. The ATM portfolio of the company includes Gramateller Indi ATM, Gramateller Duo ATM, and solar powered options for both these models.

Vortex expects around one lakh ATMs to be added in the market in the next three to four years, of which at least 50 percent would be in their area of interest. Commenting on the competition, Kannan says, “In a way, our offering is very unique, as  there is no equivalent product or offering which suits non-metro segments. However, we face competition from regular ATM vendors NCR, Diebold, and Wincor Nixdorf.”

The company has 130 employees as of now and was selected as one of the 10 startups that would change your life by TIME; is one of the 31 Technology Pioneers 2011 selected by World Economic Forum, and a finalist at the Wall Street Journal Asia Innovation Awards 2010.

Kannan has over 20 years of experience with NGOs and other groups engaged in rural development. Prior to founding Vortex, he founded a matriculation school in Tamil Nadu. Kannan was associated with the LRAMP programme at IIT Madras and holds various patents on the Vortex ATM design. Kannan did his B.Tech, Mechanical Engineering from IIT Madras.

Tata Capital Innovations Fund is a domestic venture capital fund, which focuses mainly on technology led innovations which represent breakthrough, fundamental or incremental change in technology or process. The fund invests in start-up, early, growth and mature stage companies.

Aavishkaar is a fund created to promote inclusive economic development in rural and semi-urban regions in India. It provides risk capital and support to early stage ventures which are scalable and have the potential to make strong positive social impact on rural or semi-urban India.