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Oikocredit opens India fintech account with bet on neo-bank Kaleidofin
Sucharita Mukherjee

Kaleidofin Pvt. Ltd, which operates an eponymous neo-bank focussed on the informal sector, has raised Rs 36 crore (about $5.06 million) in a Series A funding round led by financial inclusion-focussed impact investor Oikocredit.

Existing investors that participated in the round include Silicon-based venture capital firm Flourish and impact investment firm Omidyar Network India, Kaleidofin said in a statement. Other existing backers Blume Ventures, angel investor Shlomo Ben-Haim and the Bharat Inclusion Seed Fund also participated.

Kaleidofin co-founder and chief executive officer Sucharita Mukherjee said the company will use the funds to strengthen its technological infrastructure and improve growth opportunities.

“At Kaleidofin, we have reimagined the way financial services are designed and accessed by the lower income groups. Our solutions take into account the financial roadblocks and vulnerability that these segments, such as volatile income streams and limited understanding of the fine print in financial products,” Mukherjee said.

The investment marks Oikocredit’s first equity investment in the financial-technology sector in India. Oikocredit equity officer Anirudh Sarda said the investment in Kaleidofin was in line with the Dutch impact investor’s strategy of promoting responsible saving and insurance products to lower-income groups.

“Kaleidofin’s unique goal-based solutions can have a positive and meaningful long-term impact on the lives of their customers, who are new to the formal financial sector,” Omidyar Network India director Amol Warange added.

Bengaluru-based Unitus Capital acted as the exclusive financial adviser on the transaction.

Chennai-headquartered Kaleidofin was set up by Mukherjee and Puneet Gupta in 2017. The neo-bank provides curated, goal-based financial solutions to customers in underbanked segments. It creates individual profiles of households based on several sources, and uses that information to tailor its services for each customer.

The startup claims that it has over 50,000 customers across 10 states in India and that it has nearly 30 network partners, including microfinance institutions, corporate houses and non-governmental organisations.

In August last year, the Bharat Inclusion Seed Fund had invested an undisclosed sum in Kaleidofin, making the fintech company the $25 million fund’s first bet. In April that year, Kaleidofin had raised $2.8 million from Omidyar, Blume Ventures and Shlomo Ben-Haim, who is an Israeli entrepreneur.

Other neo-banks that have raised money in recent months include NiYO Solutions, which received $35 million in a Series B funding round from several investors, including Chinese conglomerate Tencent. In September, digital banking firm Yelo raised seed funding in a round led by multi-stage investor Matrix Partners India.

In June, Tiger Global led a Rs 210 crore Series B funding round in Bengaluru-based Open, which provides collection and payout automation services for small businesses.

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