Bhavin Turakhia’s Zeta turns unicorn, raises $250mn from SoftBank at $1.45bn

Bhavin Turakhia, co-founder and CEO, Zeta

Banking software platform Zeta said on May 24 that it has raised $250 million led by Japan’s SoftBank, valuing it at $1.45 billion and making it India’s 14th unicorn of 2021 so far- firms valued at over a billion dollars- in a record breaking year.

Zeta, founded by serial entrepreneur Bhavin Turakhia and Ramki Gaddipati was last valued at $300 million when it raised $60 million from Sodexo- also Zeta’s largest customer currently.

Zeta’s platform helps banks elevate their technology, offering a seamless experience to create accounts, use debit and credit cards, avail a loan or overdraft, among other things.

“There are relatively fewer players in banking tech. This is one of the last frontiers in tech adoption...What we offer is basically a bank in a box. So banks can offer an experience as good as neo banks,” London-based Turakhia said on a Zoom call.

“The space we operate in is very different from what fintechs play in so far. This has been considered the big boys’ play, and this is the first time a startup like Zeta is venturing into the heart of banking,” Gaddipati said.

Zeta has so far earned a revenue of about $10 million, said a person familiar with the matter, making its valuation about 145 times its revenue. However Turakhia said the company has signed contracts which will earn it a revenue of over $200 million.

Turakhia also said he expects Zeta to be profitable on an EBITDA basis (Earnings Before Interest Taxes Depreciation and Amortisation) by 2023-24. EBITDA is a metric used to measure operating profits.

Zeta said customers include Sodexo, HDFC Bank, Kotak Mahindra Bank, Axis Bank, IndusInd Bank, Yes Bank and RBL Bank.

“Banking software is a $300 billion industry globally. Most banks still employ technology which is significantly older than their customers, impacting user experience and engagement. Zeta’s modern Omni Stack will drive banking software upgrades catering to the digital consumer, and innovations in financial services globally,” said Munish Varma, Managing Partner, SoftBank Investment Advisers.

The deal also continues SoftBank’s dealmaking spree in India after a relatively quiet 2019 and first half of 2020. In 2021 it is expected to deploy over $1.5 billion across half a dozen companies.

Avendus was the investment banker to the deal.