Neobanks are the latest trend in the fintech sector, allowing users to avail all the functionalities of a standard bank on the web. Despite having a rough relationship with the banking organizations in its nascent stages, the neobank market in India is slowly becoming more and more mainstream, and has reached a stage where actual banks are partnering with them to expand their own offerings. Thus, in this new era of banking, Google and Temasek have invested $100Mn in Indian neobank Open, taking its total to date raise to $137Mn.
The Series C funding round was led by Temasek, while Google, Visa and Japan’s SBI Investment participated in the round, along with existing investors Tiger Global and 3one4 Capital. With this funding, Open has reached a massive valuation of half a billion dollars, which is especially impressive considering the fact that the company was just started in 2017.
The company plans to use this capital to broaden its offerings and also expand to international markets such as Southeast Asia, Europe, and the U.S. Moreover, it will also look to make strategic mergers and acquisitions opportunities in India and other markets. Last but not least, the money will also be utilized towards hiring more talent.
Open operates a neobank that allows users to avail everything a normal bank has to offer, without the need for setting up physical locations. This includes payments, lending, credit, and savings, among other things. It competes with the likes of Niyo and Razorpay, and is working to change the banking habits of India.
India’s fintech market has changed drastically over the last few years, especially after the advent of UPI. However, to this date, small and medium scale enterprises continue to struggle with the idea of maintaining multiple bank accounts, bookkeeping, salary disbursement etc. A neobank will Open solves these issues with a seamless experience that is built leveraging technology.
Open has also started partnering with existing banks in the country, and provides its neobanking technology to banks in a white-label licensing arrangement.