Neobanking platform, Open, has secured $50 million in a Series D round. With this, the startup has become India’s 100th unicorn.
Open, a neobanking platform for small and medium-sized businesses (SMBs), has secured $50 million at a $1 billion value. As a result, it is the 100th unicorn to emerge from India, marking a watershed moment in the Indian startup ecosystem. IIFL led the Series D round, which included previous investors Temasek, Tiger Global, and 3one4 Capital. In addition, the firm is the 16th unicorn of 2022.
The funding comes only six months after Open received $100 million in a financing sponsored by Google, Temasek, Visa, and SoftBank Investments of Japan. The company’s valuation after the last round was $500 million, and it has now more than quadrupled with this investment. Services such as digital banking, payments, invoicing, and automated bookkeeping are included in the account.
Open is also one of the few unicorns that has two female co-founders. So far in 2022, India has seen the birth of 16 new unicorns.
Apart from its existing SME credit card options, the platform is preparing to launch three new products focused at increasing the capital needs of SMEs. Open Flo, an innovative revenue-based financing solution for ecommerce enterprises, Open Settl, an early settlement credit offering, and Open Capital, a working capital loan option for SMEs, are among the new items. In the next 12 months, Open hopes to disburse $1 billion in financing through its expanded array of products on the platform.
While a few unicorns have struggled to raise funds in 2022, particularly in the late stages, due to their high cash-burn model, corporate governance lapses, and other issues, venture capital firms such as Sequoia and Accel have raised or are in the process of raising large funds to invest in startups in India, indicating their optimism about India’s startup ecosystem.
Dr. Jitendra Singh, Minister of Science and Technology, has stated that the country is currently ranked third in the world in terms of unicorns, with 99 unicorns in the country. This is also a strategic collaboration for Open with IIFL as it seeks to develop its lending segment for SMEs.
According to insiders, the company would be able to tap IIFL’s Rs 2,000 crore loan book. In addition, the business is striving to accelerate the launch of two new product lines: Zwitch, an embedded finance platform, and BankingStack, a cloud-native SME banking platform for financial institutions that is presently in use by over 15 banks in India.
Over the following year, Open will grow its user base to five million SMEs and extend into worldwide areas such as South East Asia, Europe, and the United States. Furthermore, IIFL serves as a strategic partner for their financing strategies. BEENEXT, Speedinvest, AngelList, Tanglin Venture Partners, Unicorn India Ventures, and Recruit are among the other investors in the business.
