Google-backed neobank Open becomes a unicorn with new funding

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There are now 100 unicorns in India. Bangalore-headquartered neobank Open entered the coveted club on Monday with a new round of funding, the report said.

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The five-year-old startup did not disclose the size of its Series D funding, but a source familiar with the matter said it was around $50 million. The new round, which valued the Open at $1 billion, was led by the Mumbai-headquartered IIFL, they said. The round also included existing backers Tiger Global, Temasek and 3one4 Capital.

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Open operates a neobank that offers SMBs and enterprises almost all the functions of a bank with additional tools to meet business needs. Millions of SMEs in India struggle with maintaining multiple bank accounts, keeping track of their daily expenses and allocating payments to employees.

The startup, which has partnerships with more than a dozen of India’s leading banks, is used by more than 2.3 million businesses, he said. Open processes over $30 billion worth of transactions every year.

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Open has expanded its offerings in recent quarters. The startup is currently providing its non-banking technology to banks under a white label licensing scheme, which then sell it to their customers.

The rise of Open in recent years, which has seen several other startups expand and innovate in the category, has dramatically changed the relationship between banks and fintech companies. Just a few years ago, most banks in India were skeptical of neobanks, and it was very difficult to convince any of them to partner, the fintech founders told TechCrunch.

“Neobanks are becoming increasingly popular as platforms for digitizing banking or banking services for millennials and SMEs. The top 4 global neobanks are worth $100 billion and Indian fintechs have started with the likes of Open, RazorpayX, Fi and Jupiter,” Jefferies analysts wrote in a report last year.

“In fact, many Indian fintechs are planning to move from 1-2 platforms now to neobanks within 3-5 years. Operating banks/NBFC cooperate with them. Monetization is still far away,” they added.

Open said it plans to launch three new products — Flo revenue-based financing, Settl prepayment cards, and Capital working capital lending — in the coming months to expand its offerings to its customers. The startup plans to provide $1 billion in loans through its new products over the next 12 months, he said.

“We are excited to partner with IIFL and existing investors Tiger Global, Temasek and 3one4 Capital for our Series D round. We see great synergies with IIFL, especially in the use of the loan book, as we prepare to launch innovative products such as revenue-based financing, early repayment, working capital loan and business credit cards for SMEs on our platform,” said Anish Achutan. , co-founder and chief executive of Open, in a statement.

This is an evolving story. Further…


Credit: techcrunch.com /

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