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Open turns unicorn; to expand product offerings, team

Open Financial Technologies raised $50 million in a series D round led by IIFL Finance. Existing investors Tiger Global, Temasek and 3one4 Capital have also invested in this round.

The neo bank said it plans to use the proceeds to expand and launch product offerings in lending, drive global expansion and double its employee base to 1000. (Mint)Premium
The neo bank said it plans to use the proceeds to expand and launch product offerings in lending, drive global expansion and double its employee base to 1000. (Mint)

Neo-banking platform Open Financial Technologies Pvt Ltd has raised $50 million in series D round led by IIFL Finance which values the company at over $1 billion, the company said in a statement.

Existing investors Tiger Global, Temasek and 3one4 Capital have also invested in this round.

The neo bank said it plans to use the proceeds to expand and launch product offerings in lending, drive global expansion and double its employee base to 1000.

Neo banks are fully digital and reach customers through mobile applications or computer platforms instead of physical branches.

“We see a lot of synergies with IIFL especially on leveraging the lending book, as we are getting ready to launch innovative products like revenue-based financing, early settlement, working capital loan and business credit cards to small and medium enterprises on our platform," Anish Achuthan, co-founder and chief executive officer, Open said.

“Indian MSMEs banking and credit delivery can be revolutionized by Open. We look forward to strengthening the partnership in multiple ways," R Venkatraman, Co-promoter, IIFL Group and Chairman, IIFL Securities said,

Open primarily offers financial payment and enterprise banking solutions to small businesses.

With this round, Open has doubled its valuation since September 2021, when it raised $62 million in Series C from Temasek, Google and existing investors such as Tiger Global Management and 3one4 Capital, the company said. The platform currently has 23 lakh SMEs and processes over $30 billion in annualized transactions, it said. It is targeting a customer base of 50 lakh SMEs and a loan disbursal amount of $1 billion through its new lending products over the next 12 months.

In December 2021, Open acquired consumer neobanking platform Finin for $10 million to strengthen its cloud-native enterprise banking vertical. Earlier in 2021, it acquired tax filing automation platform Optobizz for around $5 million (around 36 crore).

Other investors in Open include Visa, Beenext, Recruit Strategic Partners, Speedinvest, Tanglin Venture Partner Advisors, Angellist, and Unicorn India Ventures. The platform has raised over $140 million in funding to date, it said.

Other neo banks that have raised capital include Jupiter which raised a Series C round last December, valuing the platform at $711 million.

In February 2021, Zolve Innovations secured $15 million in a seed round led by Accel and Lightspeed.

ABOUT THE AUTHOR
Ranjani Raghavan
Ranjani Raghavan writes about the Indian investment ecosystem with a focus on venture capital, private equity and startups. Outside of work, she enjoys sketching and birding. You can find her @ranjanir_
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Updated: 02 May 2022, 02:24 PM IST
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