Neo-banking platform Open Financial Technologies Pvt Ltd has raised $50 million in a Series D funding round led by IIFL Finance at over $1 billion valuation, the company said in a statement.
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. At $1 billion valuation, Open is the newest unicorn in town, or a privately-held startup at a valuation of at least $1 billion.
The neo bank said it plans to use the fresh capital 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,” said Anish Achuthan, co-founder and chief executive officer, Open.
“Indian MSMEs banking and credit delivery can be revolutionized by Open. We look forward to strengthening the partnership in multiple ways,” said R Venkatraman, Co-promoter, IIFL Group & Chairman, IIFL Securities.
Open primarily offers financial payment and enterprise banking solutions to small businesses.
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.
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.
In its first institutional fundraise in June 2019, Open had raised Rs 210 crore (around $30.2 million) in a Series B funding round led by US-based Tiger Global, with participation from Tanglin Venture Partners Advisors, 3one4 Capital, Speedinvest and BetterCapital AngelList Syndicate.
Other neo banks that have raised venture capital include Jupiter, which secured a Series C round last December, valuing the platform at $711 million.
In February, Zolve Innovations secured $15 million in a seed round led by Accel and Lightspeed.