Indian fintechs had quite the day yesterday - 2 of them raised large sums of money.
Neo-Banks have been getting pretty popular over the past 2 years or so.
One of the neo-banks for businesses -- Open just raised $100 million.
A quick note - none of these neo-banks actually have a banking license, they basically partner with existing banks and provide a good UI with some additional features.
Open has partnered with ICICI Bank for the creation of accounts.
In terms of features, they provide almost everything a business would need on top of what a normal bank would provide.
They provide services like bookkeeping, expense management, employee payment and taxes. What more could you ask for, right?
You must be wondering if traditional banks have all these services too? Well, they do have some of them but they charge a huge amount. And for small businesses paying that much just isn't feasible.
Clearly what Open has been doing has struck a chord.
They have 100,000 business users and are processing $5 billion in annual transactions!
Post this round their valuation is reportedly at $500 million.
Fintech Infra Provider Also Raises
M2P Fintech has also gone on to raise $35 million.
Some of you may remember the fintech infrastructure startup YAP.
YAP has decided to rename itself as M2P Fintech. Frankly, we liked YAP a lot better, but what do we know 🤷♂️.
YAP provides companies with the building blocks to insert financial services within their applications.
They basically act as a technology layer between a financial institution (like banks) and a brand (like fintech players).
Their building blocks are all through the fintech stack btw. So they provide APIs (explanation here) across payments, banking and yes the famous 'L' word that all our Indian startups love-- lending.
Most of the poster boys of the startup world here use YAP. Ola for Ola Money, PaisaBazaar, CRED, Slice etc are all customers.
YAP has actually been around for many years now. They were a bootstrapped company for almost 5 years before they raised 2 rounds of funding last year.
YAP already serves customers in the UAE, Australia and New Zealand and they plan to expand to a lot more countries with this round of funding.