NiYO Solutions Inc, a fin-tech firm that digitises payroll and employee benefits management, has raised $13.2 million (Rs 85 crore) in a Series A round from US-based venture capital firms Social Capital, JS Capital and Hong Kong-based Horizon Ventures.
Its existing investor Prime Venture Partners also participated in the current round. PVP had invested $1 million in the company in 2016.
The company will use the funds to expand into smaller cities, develop its product, and ramp up customer service, Vinay Bagri, chief executive and co-founder of NiYO told VCCircle.
Founded in 2015 by Bagri and Virender Bisht, the fin-tech firm currently has 500 employers representing more than one lakh employees. While NiYO is the US registered holding entity, its Indian subsidiary, Finnew Solutions Pvt Ltd, runs the business in the country.
In an interview with VCCircle in 2015, Palihapitiya had said that he wanted to invest in uniquely Indian companies and planned to put in $100-200 million every year in the country. The Sri Lanka-born 41-year-old, who served as vice president of Facebook and was responsible for the social networkâs user growth from 2007 to 2011, had overseen a steep rise in the social networkâs user base from a few million to close to a billion when he quit the firm. He added that he was open to investing as much as $1 billion in Indian startups by 2025. In 2015, his firm led the Rs 150 crore ($24 million) round into mobile payments provider Ezetap.
JS Capital is the family office of Jonathan Soros, son of George Soros who ran the storied US investment firm Soros Fund Management. In August lastÂ year, the fund had co-invested along with the Social Capital and other investors in PVP portfolio company Ezetap.
âThis is a highly underpenetrated market with more than 75 million salaried employees. A lot of salary benefits are increasingly being mandated by the government to be digitised. We are limited only by our capacity to grow," Bagri said.
The Bengaluru-based company presently has 75 employees and looks to double its headcount over the next six months.
While 60% of the companyâs customers use its platform to manage salary accounts, 40% use it to run the benefits programme. Users can continue using the same NiYO account even if they move jobs.
Bagri said that when salary is low, banks are not keen to open salary accounts for them with zero minimum balance.
"The combination of smartphone penetration and IndiaStack makes the timing right for NiYOâs patent-pending innovations to come to market. Powered by mobile, they are providing an effortless and innovative solution to manage payroll and benefits,â said Sanjay Swamy, managing partner, Prime Venture Partners.
NiYO issues MasterCard/Visa cards over a prepaid instrument through partnerships with Yes Bank and DCB Bank. The startupâs payroll product customers are mostly employers who recruit people in the sub-Rs 20,000 salary bracket, while the benefits programme customers comprise mainly large enterprises. NiYO charges a fee of Rs 200 annually for the card from its customers apart from the transaction fee from merchant payments made using the card.
"This is an area that hasnât seen much innovation in the Indian technology ecosystem, despite the massive addressable market. We believe that India is on the brink of unprecedented consumer consumption, and that movement begins with infrastructure that manages peopleâs earnings in a reliable and modern way,â said Arjun Sethi, partner at Social Capital.
The Reserve Bank of India recently mandated that all meal coupons be digitised from 2018. The move prompted many corporates to digitise the benefits part of the salary instead of offering it in paper format. NiYO competes with Bhavin Turakhia-backed Zeta, Sodexo, and other companies, but most of them focus chiefly on some segments of the benefits part of the salary.
"With a stellar team and a technologically advanced and innovative product, NiYO has seen strong early traction. We are excited to be a part of their journey to address this massive market opportunity," said Salil Seshadri, chief investment officer, JS Capital Management, LLC.