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

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Published: June 25, 2019 7:24:52 PM

American hedge fund Tiger Global Management, which is among Brazilian neobank unicorn Nubank's early investors, is looking to create a similar success story from India with Bengaluru-based neobank startup Open.

With the latest funding, Tiger Global has acquired around 15 per cent stake in Open. (Image: bankopen.co)

Among Indian startups’ most prolific backers, American hedge fund Tiger Global Management, which is among Brazilian neobank unicorn Nubank’s early investors, is looking to create a similar success story from India with Bengaluru-based neobank startup Open. Tiger Global poured $30 million in Open, which offers business banking service for SMEs and start-ups, at a valuation of $150 million — a 6.5 per cent increase from $20 million valuation when it raised $5 million in Series A funding in February this year, Open’s CEO Anish Achuthan told Financial Express Online

“We are one of the fastest growing neobanking platforms adding around 20,000 customers (SME/startups) every month. Currently, we have 1 lakh customers and we are looking to grow the number to 1 million by September 2020,” said Achuthan. Open currently processes around Rs 35k crore in annualised transactions on the platform.

With the latest funding, Tiger Global has acquired around 15 per cent stake in Open and that is not a bad bargain given the valuation has gone significantly upward, a source familiar with the fundraise told Financial Express Online.

The round also saw participation from Tanglin Venture Partners Advisors as a new investor while its existing investors 3one4 Capital, Speedinvest and BetterCapital, AngelList Syndicate also contributed in the round.

While neobanking is a 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.

“Tiger Global had backed Nubank in 2015 that has become a big success story in the region. Also, some of our investors like Speedinvest are also investors in unicorns like N26. This is led to a lot of interest from international investors including Tiger Global as they see similar success with us in India,” said Achuthan. However, while Nubank is more B2C focused, Open has the B2B model and was launched in October last year. NuBank is reportedly valued at around $4 billion.

The startup currently has 80 people and looks to expand it to 200 in engineering and product departments. The startup is also two new products — Open+ card — a business credit card with a 30-day interest-free credit line for venture-backed start-ups and Layer — a programmable bank account for developers. The startup we will continue to look for more funds in 12 months from now being a “capital intensive business,” said Achuthan.

Open ties-up with banks to provide a business account to its customers to automate their businesses and run their finances. The account includes tools to help businesses send and receive payments combined with the automated bookkeeping.

Tiger Global has been backing multiple B2B startups including CheckMate, Facilio, Fyle, Innovapptive, Clevertap, OKCredit etc., after a virtual freeze of investing in startups post-2016 funding slowdown.

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