Moneycontrol
Jan 10, 2018 11:18 AM IST | Source: Moneycontrol.com

Bangalore based payroll-tech startup NiYO bags $13.2 mn led by Social Capital

Bangalore based VC fund Prime Ventures, which invested USD 1 million as seed capital in 2016, also participated in this round.

Prime Ventures-backed payroll and benefits tech startup NiYO Solutions has raised USD 13.2 million, or Rs 85 crore, in Series A funding from Chamath Palihapitiya owned Social Capital, the family office of Jonathan Soros JS Capital, and Li-Ka-Shing owned Horizons Ventures.

Bangalore based VC fund Prime Ventures, which invested USD 1 million as seed capital in 2016, also participated in this round.

NiYO provides expense cards with all HR functions integrated into it - including salary and benefits. The company plans to strengthen and expand its product suite for the salaried segment besides taking the product to tier 2 and 3 towns with the fresh funding.

The funding will also be used for further product development, team expansion and increasing presence in tier 1 cities.

The company was co-founded in 2015 by ex-Kotak Mahindra executive Vinay Bagri and former Mobikwik employee Virender Bisht.

According to NiYO CEO Bagri, the addressable market for the company's products is close to 75 million salaried employees in India. The product can also increase the take-home salaries and simplify financial planning and other banking needs for employees, he claims.

“We believe that the rapidly growing number of salaried employees in India have not seen much innovation when it comes to their own payroll and benefits. They are mobile and app-savvy and very demanding. Our aim is to optimize the product suite for employees in areas of taxation, lending and wealth,” NiYO CEO Bagri says.

It has tested the product in new markets such as Pune and Ahmadabad and plans to be present in 40 cities by the year-end.

Most companies today use Sodexo meal coupons as part of tax saving methods, which can be used in office canteens or at selected merchant outlets. However, companies such as NiYO and competitor Zeta are taking a digital approach to it. These companies have brought the whole process online. NiYO’s current portfolio of clients consists of 40% enterprise and 60% MSME companies.

NiYO is aiming to have 5000 organisations and over 1 million salaried employees as users by the end of 2018. NiYO has already clocked more than 500 corporate clients and is being used by over 170,000 salaried employees in these organisations.

“For corporates, it means time saving, deploying less manpower in doing manual work of matching bills, and so on. They can drastically optimize their time. The bigger market is in MSMEs who are heavily dependent manual intervention,” says Bagri.

NiYO’s expense card solutions include salary accounts, meal cards, canteen solutions, corporate gift cards, reimbursement accounts, international travel card and corporate credit cards. The startup has partnered with YES Bank and DCB Bank so far for its solutions.

The plastic card can be used to pay for food, fuel, medical bills, which are then tracked against individual reimbursement claims automatically.

The paperless approach can bring down per employee cost of executing salaries and reimbursements by as much as 40 percent, according to Bagri.

While Sodexo has now started tying up with online portals such as Swiggy to let its users pay with the meal pass card, NiYO’s card is accepted across all payment terminals by default.

Employee Payroll in India and around the world has traditionally seen very little innovation in the past several decades with banks hardly providing any differentiation to customers. This coupled with inefficient, paper-driven processes mean that most employers and employees fail to take advantage of tax exemptions and other savings that the law provides for.

Same holds true for investment and lending products for the salaried class where the power of payroll is largely ignored in product design.

NiYO has also filed multiple product and process patents in this space, which implies that the startup plans to include more financial products on the platform such as loans, mutual funds, besides the basic banking functions it integrates now such as balance inquiry, fund transfer, and so on.

“We want to implement more financial products going forward. It will help employees identify the right products for their tax saving such as ELSS, mutual funds etc.,” Bagri says.

With eKYC and self-onboarding enabled on the NiYO app, users can easily access their account details and keep a tab on their expenditures and allowances digitally. It also offers a capability to attach bill proof through mobile phones and also allow digital storage of bill and receipts on the cloud. It's competitor also includes Bangalore-based Happay which also offers prepaid cards for expense management.
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