By Salman SH
Niyo, a consumer-focused neo-banking platform, has raised $100 million in its Series C round of funding led by Accel and Lightrock India, with participation from Beams Fintech Fund. Existing investors Prime Venture Partners, JS Capital are also participating in this round, along with others.
The company will utilise the funds for product innovation, marketing & branding, increasing its distribution footprint, and hiring top talent across functions. Niyo is also looking to provide comprehensive financial services to over 30 million users through both organic and inorganic expansion in the next few months.
Founded in 2015 by Vinay Bagri and Virender Bisht, Niyo offers digital savings accounts and other banking services in partnership with banks. The start-up currently serves about 4 million customers across its banking and wealth management products, with over 10,000 new users added daily to its platform. Niyo claims that it is processing over $3 billion transactions on an annual basis.
The neobank also recently launched a digital salary account this month and is in the process of launching personal loans, credit cards, integrated forex and other banking products in the next three months. To date, Niyo has raised funding worth $145 million including the current round.
“We are seeing massive tailwinds for digital financial products since Covid. Launched less than a year ago, our first-of-a-kind product offering ‘NiyoX’ is democratising the superior digital banking experience for users, and has witnessed tremendous user adoption. With this raise, we aim to expand the product suite for our customers and meet their growing expectations,” Niyo co-founder and CTO Virender Bisht said in a statement.
“We are extremely excited about the potential of Niyo in re-imagining the banking experience for millions of users in India across the income pyramid. Neobanks are an emerging asset class in India and believe that the quality of Niyo’s team, customer understanding and technology stack will enable them to emerge as the leader of the space,” added Ashish Garg, principal at Lighrock India.
The neo banking space has been a focus of investor attention ever since India began pushing digital payments through the government-sponsored UPI payment ecosystem. Throughout the 12-month period from February 2021 to January 2022, UPI transaction volume hit a record of `75.6 lakh crore, according to The National Payments Corporation of India’s (NPCI) official data.
Unlike traditional banks, a neobank does not have a brick-and-mortar presence on the ground. Hence, by cutting down capex involved running physical banking points, neobanks instead focus on investing more in digital banking and payments technology.
Other players in the segment include Jitendra Gupta-led Jupiter which raised $86 million at a $711 million valuation in December 2021, and B Capital-backed Fi, which had raised $50 million at a $315 million valuation in November.