Today, the India Bengaluru-headquartered Neobank Open has raised $50 million in its Series D round led by India infoline (IIFL) with participation from existing investors Temasek, Tiger Global, and 3one4 Capital.
The new round, which valued Open at $1 billion, was led by Mumbai-headquartered investment firm IIFL. The financing included existing investors Tiger Global, Temasek, and 3one4 Capital and comes just seven months after Open announced its Series C funding at a $500 million value. To date, Open has raised over $187 million.
Neobank provides small and medium-sized organizations and enterprises with nearly all of the capabilities of a bank and additional tools to meet their needs. In India, millions of small and medium-sized enterprises struggle to keep track of several bank accounts, keep track of daily expenditures, and distribute payments to employees.
According to the company, more than 2.3 million businesses in India use the startup, which has connections with over a dozen prominent banks. Each year, Open handles about $30 billion in transactions.
In recent quarters, Open has broadened its offers. In a white-label licensing arrangement, the business now sells its neobanking technology to banks, subsequently selling it to their consumers.
The rise of Open in recent years, which has prompted several other firms to enter and innovate in this space, has altered the relationship between banks and fintechs substantially. Most Indian banks were wary of neobanks just a few years ago, and convincing any of them to partner was challenging, according to fintech innovators.
Open said it plans to launch three new products in the next months to enhance its client offerings: revenue-based financing Flo, early settlement card providing Settl, and working capital loan Capital. Within the next 12 months, the business hopes to disburse $1 billion in loans through its new offerings.
In a statement released by the co-founder and chief executive of Open, Anish Achuthan said: “For our series D financing, we’re thrilled to be partnering with IIFL as well as previous investors Tiger Global, Temasek, and 3one4 Capital.”
“We see a lot of synergies with IIFL, particularly in terms of leveraging the lending book, as we prepare to offer novel products for SMEs on our platform, such as revenue-based financing, early settlement, working capital loans, and business credit cards.”