Indian startups, investors tap neobanking market; after Tiger Global, Tencent and Horizons back neobank startup

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Published: July 9, 2019 7:02:24 PM

Even as neobanking is a fairly new concept in Asia but in Europe, there are neobanking unicorns like Revolut, N26, Monzo, etc., that have become unicorns in a few months after launching.

The funding comes just around two weeks after Tiger Global backed another neobank startup Open. (Image: Google Play)

Neobank startup NiYO Solutions has raised $35 million in Series B funding round from Horizons Ventures, Tencent and existing investor, JS Capital. The funding comes just around two weeks after Tiger Global backed another neobank startup Open with $30 million.

The current round takes NiYO’s total fundraising to $49 million from previously raised $14 million in rounds led by Prime Venture Partners.

Even as neobanking is a fairly new concept in Asia but in Europe, there are neobanking unicorns like Revolut, N26, Monzo, etc., that have become unicorns in a few months after launching. 

The capital raised by NiYO would be deployed towards developing and introducing new product offerings faster, enhancing distribution and marketing and looking at international markets for expansion particularly emerging markets that can be digitally disrupted through neo-bank concept, the company said in a statement. The startup offers two solutions, Bharat Payroll solutions that provide modern salary account for India’s blue-collar workforce and Global Card that offers banking services for travellers. 

Also read: Tiger Global wants to repeat Brazil’s neobank unicorn Nubank success with Indian startup Open

NiYO claims to be among the largest fintech companies in the neobanking space with around 1 million users that it is looking to grow to 5 million in the coming three years even as the company has been witnessing “strong growth across business metrics in the last 12 months, said Vinay Bagri, cofounder and CEO, NiYO. 

The startup providing neo-banking to the blue-collar segment has been exciting for its investors as it is “helping drive the benefits of digitization, financial inclusion and to the hard-working masses in India, said Sanjay Swamy, Managing Partner, Prime Venture Partners. 

NiYO’s Bharat Payroll Solution focuses on the massive blue-collar workforce, primarily in unorganized or semi-unorganized labour-intensive sectors to provide them with a platform to manage savings, payments, investments and financial protection (insurance). The NiYO Bharat Mobile App is available in eight languages and is speech enabled.

Neobank startup Open has 1 lakh customers and is adding around 20,000 customers (SME/startups) every month. The startup is looking to grow the number to 1 million by September 2020, CEO Anish Achuthan had told Financial Express Online.

Neobanks are usually the fintech companies that provide digital financial services such as savings accounts, payment and money transfer services, loans for businesses and individuals and other services such as help in budgeting help etc.. Unlike traditional banks, neobanks don’t have branches and may not be chartered with country’s regulators as financial institutions.

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