Neo bank Open has raised $100 million as part of its Series C round of funding, a person directly aware of the development told Moneycontrol. The round was led by Google, Temasek, Visa, and Japan’s SoftBank Investments and now values the company at $500 million. Existing investors Tiger Global and 3one4 Capital too invested in the round.
Founded in 2017 by Anish Achutan, Ajeesh Achutan, Mabel Chacko, and Deena Jacob, Open focusses on small and medium-sized businesses by offering them a business current account. The account includes services like digital banking, payments, invoicing, and automated bookkeeping services.
The company said it plans to use the funding to further strengthen and accelerate its new product lines – Zwitch, its embedded finance platform and BankingStack, the cloud native SME banking platform for financial institutions which is currently deployed at over 15 Banks in India.
Over the next year, Open will expand its base to five million SMEs and expand to global markets like South East Asia, Europe and the US.
The company is hoping to become a unicorn and achieve a valuation of over $1 billion with its next funding round which it is expecting to close in the next six months. A unicorn is a privately funded company with a valuation of $1 billion or above.
The Bengaluru-based startup is in talks with leading investors for an intermediary round or a Series D round in the coming months.
Currently, the neo bank space is seeing aggressive competition with players like Khatabook and Razorpay ramping up their offerings. Open is hoping to achieve the unicorn status soon to maintain its competitive edge and to continue attracting sizeable investments in the future.
Razorpay, valued at $3 billion is scaling its neo banking platform RazorpayX and Khatabook too recently raised $100 million, growing its valuation to $600 million. The space will see further competition from new entrants looking to build models similar to Open.
Other investors in Open include BEENEXT, AngelList, Tanglin Investment Partners, Unicorn India Ventures, Speedinvest, and Recruit.
This marks Google’s fourth investment in the Indian startup space after Glance and DailyHunt in December 2020, followed by the acquisition of social commerce player Simsim through YouTube this year. Google has committed an investment of $10 million in India’s tech space.
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