TVS Capital Funds to lead next round in Google-backed Open at a valuation of $1 billion

Open co-founders Anish Achutan, Mabel Chacko, Deena Jacob and Ajeesh Achutan (L-R)

Neobank Open is the next in line to join the unicorn club with its upcoming funding round that will value the company at over $1 billion. Moneycontrol learns from sources that the round will be led by TVS Capital Funds, the term sheet for which has been signed.

The round will also see participation from existing investors and is a mix of primary and secondary fundraising. Of the $100 million, the fresh (primary) fundraise is in the range of $50 to $75 million, according to two people aware of the development.

“Open is in talks with sovereign funds Abu Dhabi Investment Authority (ADIA) and Qatar Investment Authority as well, but they may join only in the next round,” added one of the people mentioned above.

Moneycontrol was the first to report in October 2021 that Open was already in talks with investors back then for a fresh round. The report had added that the startup was keen on initiating another round right after its Series C round in October 2021 to achieve the unicorn status soon in a bid to maintain its competitive edge and to continue attracting sizeable investments in the future.

A unicorn is a privately funded company with a valuation of $1 billion or above.

During Open’s Series C round, the company raised $100 million led by Temasek and with participation from Google, Japan’s SBI Investments and Visa.

The previous round valued Open at $500 million, and the current round will double the company’s valuation. The startup’s other investors include Tiger Global, 3one4 Capital, BEENEXT, Speedinvest, AngelList, Tanglin Venture Partners, Unicorn India Ventures and Recruit.

Open’s jump in valuation is on the back of the funding rush seen by startups in 2021 is continuing into 2022 with a host of startups having raised multiple rounds in quick succession over the past year, and valuations ballooning with each round.

For TVS Capital Funds, this is the third fintech investment after Digit Insurance and enterprise debt marketplace CredAvenue.

Moneycontrol reached out to Open, which declined to comment on the story.

Open, which serves as a neobanking platform provides business banking solutions for Small and Medium Enterprises (SME). Its products include providing current account, credit, payroll, invoicing, cash management services, among others, to SMEs, startups and freelancers.

While the neobanking space has a large number of players including Jupiter, Freo, Niyo, EpiFi etc., Open directly competes with RazorpayX which is also an SME-facing neobank. The other players provide banking solutions for individuals.

As per the startup’s latest financial filings for the financial year 2020 (FY20) accessed through Tofler, the company had reported a loss of Rs 42 crore, with revenues at Rs 8.61 crore.

Open was founded in 2017 by former PayU and Citrus Pay executives Anish Achutan, Mabel Chacko and Ajeesh Achutan, along with Deena Jacob. The company also has an embedded finance platform Zwitch and a cloud-native SME banking platform BankingStack, besides the neobanking operations.