Kerala got its first unicorn startup after fintech firm Open Financial Technologies, supported by the Kerala Startup Mission (KSUM), raised $50 mn from Mumbai-based IIFL Finance in a Series D funding round recently. A neo-banking platform for SMEs, the Kerala-based startup is India’s 100th unicorn, entering the elite club with a valuation of $1 billion.
Founded by Anish Achuthan, Mabel Chacko, Deena Jacob and Ajeesh Achuthan in 2017, the startup has partnered with over a dozen top banks in India. Open has also built Asia’s first digital banking platform for SMEs, startups, and freelancers. The Series D round also saw participation from Open’s existing investors, including Singapore’s sovereign wealth fund Temasek, US hedge fund Tiger Global, and 3one4 Capital. It has raised $140 mn in funding so far.
Open had got early-stage funding of Rs 2 crore under KSUM’s Fund of Funds programme. KSUM is the nodal agency of the Kerala government for entrepreneurship development and incubation activities in the state. The state’s chief minister, Pinarayi Vijayan, lauded Open’s move to give back to the state by setting up a fintech accelerator and finishing school in collaboration with KSUM to support startups coming up with fintech solutions. To bolster the state’s startup ecosystem, the company has proposed to invest Rs 200 crore over the next five years as part of the Centre of Excellence and fintech accelerator programmes, he added.
John M Thomas, CEO, KSUM, said, “By providing innovative services and sustaining its focus, Open has attained great growth in its niche sector. Kerala’s fintech startups can emulate Open’s success story. By bagging the honour of being a unicorn in a highly competitive milieu, it will serve as a model for its peers.”
Open will use the fund it has raised to boost its existing product offerings—Zwitch (embedded finance platform) and BankingStack (enterprise banking solution for banks)—drive global expansion and reach over five million customers over the next year. The fintech startup will also ramp up its leadership team, and increase its employee headcount from 500 to 1,000 over the year.
Open is gearing up for the launch of three new products in the SME lending space: Open Flo (a revenue-based financing product for ecommerce businesses), Open Settl (an early settlement credit offering), and Open Capital (working capital offering for SMEs).
Open’s platform adds over 20,000 SMEs every month, making it the fastest growing SME-focused neo-banking service globally. It is also planning to expand to Southeast Asia, Europe, and the US.