There is immense focus and push into digital payments in India. And why not ? It is the world’s second most populous nation, which makes it excruciatingly difficult to develop physical banking infrastructure for all of the country’s 1 billion+ people. While B2C digitisation has been a priority, off late, India has seen a strong push towards digitising fintech for its small and medium enterprises.
One such startup, trying to do the same through its neo-banking platform is Open. More on neo-banking later.
Open has raised $30 million in its series B round of funding for its neo-banking platform. This round was led by Tiger Global, and included contributions from Tanglin Venture Partner Advisors and its existing investors 3one4 Capital, Speedinvest and BetterCapital. AngelList Syndicate also participated in the round.
Earlier this year, Open had raised $5 million in a Series A round. This round was led by BeeNext, along with 3one4 Capital and Speedinvest.
Neo-banking flourishing in Europe
Neo-banks may be a new form of banking for India but theses fintech startups are already flourishing in Europe and America. Neo-banks are digital banks which essentially means that these banks do not have any physical branch. They operate through apps and online services.
And since everything is over the cloud, it is fairly easy to add services as per need and customisation for a specific section of customers. These neo-banks also help businesses maintain multiple accounts and keeping track of daily transactions. They help small and micro businesses to automate their business finances.
Open is not only India’s but also Asia’s first neo-banking platform. It’s a two year old startup and based in Bangalore, India. It is different from a traditional bank in many ways. Open provides banking services at a low cost and with no extra charges for small businesses whereas these same services require them to pay hefty charges, when taken through a traditional bank. Being a digital bank, services provided by Open are available 24×7. They also provide premium credit cards as well a integrated online payment services.
Open says it processes about $5 billion in transactions every year. It has a customer base of 100,000 with 20,000 joining each month. Currently, the company has team of 85 people. The company has SMEs at its focal point.
The startup has partnered with ICICI bank for creation of accounts and provides integrated tools like a payment gateway on the bank’s website.
Anish Achuthan, founder and CEO of Open, said that they’ll be using this fund to build new products, expand their team and increase their the number of consumers. The company will soon launch Open Duo Card which will have credit mode to get a 30 day credit line for business expenditure. It will allow users to set mints on the card and keep track on the spending by employees.
The company also plans to launch a programmable bank account – Layer – for developers. I am excited about the prospects that could offer. Open already provides a slew of APIs for developers to integrate into their product.
Armed with a sizeable financial war-chest, Open aims to increase its customer base to 1 million within next year.