Bangalore-based Neobank Open is in advanced stages of talks to raise about $100 million, according to two sources familiar with the matter.
Temasek, the Sovereign Wealth Fund of the Singapore government, and General Atlantic are in a position to co-lead the Series C financing round that values the Indian startup at pre-money $600 million, sources told ClearTips, anonymity. request as the matter is private. Two years ago the open was valued at about $150 million in its Series B funding.
Sources said existing investors Tiger Global, PayPal, which shut down its domestic operations in the world’s second-largest internet market earlier this year, as well as Google and Amazon are in talks to participate in the new round. .
Indian news outlet Economic Times first reported the size of the impending round and earlier this week identified Google and Amazon as potential investors. The round is not closed yet so terms may change and not all investors may support Open. The startup’s founder and chief executive Anish Achuthan declined to comment.
Open acts as a Neobank which provides almost all the features of the bank along with additional tools to meet the needs of the businesses. The startup provides services like automated account, payment gateway, credit card, automated bookkeeping, cash flow management and tax and compliance management solutions to its customers.
Realizing the opportunity that they cannot tap the entire market, several banks in India have started collaborating with fintech startups in recent years to expand their reach in the South Asian nation.
“Banks are doing their best to protect their turf by focusing on multiple fronts – ecosystem building (led by HDFC Bank), open approach to fintech partnerships (led by ICICI Bank), as an acquisition tool in the holistic digital experience (led by Kotak and Axis) etc. But [they] Keep playing catchup because they lack focus/expertise in each channel (banking super apps and APIs are becoming increasingly sanitized). Fintech revenue already accounts for ~10% of fee income of private banks, but could grow >3x over the next 3 years,” Bank of America analysts wrote in a report late last year.
“Of course banks want to own the pipe and relationships, but they are unlikely to succeed except in very specific areas,” he said.
In recent months, however, some banks have begun to re-evaluate their engagement strategy with Neobank, an Indian news and analysis publication, as Captable reported last month.