Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
Open has attained unicorn status after concluding a Series D funding round led by Indian diversified financial services company IIFL.
Open, an Indian-based neobank, recently became the 100th unicorn in the South Asian country after a new $50 million funding. Mumbai-headquartered investment firm IIFL led the Series D exercise, which valued Open at $1 billion. Other participating investors were existing backers Tiger Global, Temasek, and 3one4 Capital.
Open’s latest funding round comes just seven months after its $100 million Series C in October. At the time, the five-year-old startup was the beneficiary of a $500 million valuation. So far, Open has now raised around $187 million to date.
Open co-founder and chief executive Anish Achuthan expressed delight at the latest $50 million fundraise saying:
“We are excited to partner with IIFL and existing investors Tiger Global, Temasek and 3one4 Capital for our series D round.”
In addition, Achuthan particularly singled out round leader IIFL as a worthy collaborator on Open’s immediate slate of financial products. In his own words:
“We see a lot of synergies with IIFL especially on leveraging the lending book, as we are getting ready to launch innovative products like revenue-based financing, early settlement, working capital loan and business credit cards to SMEs on our platform.”
Open looks to launch three new products in the coming months, namely revenue-based financing Flo, early settlement card offering Settl, and working capital lending Capital. The Bengaluru-headquartered neobank sees this as a way to further broaden its offerings to its customer base. Furthermore, within the next 12 months, Open is targeting a disbursement of around $1 billion in lending through its new products.
Neobank Status in India & What This Latest Open Unicorn Bestowment Means
The recent valuation of Open as a unicorn is a watershed moment in the Indian financial landscape as several neobanks are working on expanding in the country. Only a few years ago, the relationship between banks and internet-only banks in India was on a less sure footing. This was because most banks in the South Asian region were skeptical about engaging in any partnership with neobanks. Now, as analysts at Jefferies wrote in a report last year:
“Neobanks are gaining prominence as platforms to digitise banking or bank-like services for millennials and SMEs. Top-4 global neobanks are worth $100 billion and Indian fintechs have made a start through likes of Open, RazorpayX, Fi, and Jupiter.”
Open’s latest billion-dollar valuation also represents another major milestone in India as a custodian of unicorns. Currently, the country is already home to one-tenth of the world’s unicorns in just a little over ten years. Back in 2012, adtech startup InMobi became the first billion-dollar company to take root in the South Asian nation. This is happening at a time when startups were still rare and funding was even harder to come by.
Now with each successful unicorn bestowment in India, a growing number of entrepreneurs are looking to build the next one. Since last year alone, over 60 Indian startups have entered the unicorn club.
Before its unicorn status, Open’s neobank services catered to small and medium-sized businesses in various ways. These included maintaining multiple bank accounts, daily expenditure bookkeeping, and bandying out payments to employees. The planned new products following the exercise will further cement Open’s status as a leading digital bank in India.
Open is backed by Google and currently used by more than 2.3 million businesses and processes over $30 billion worth of transactions each year.