Exclusive: Temasek, Google and others invest $62 Mn in neobank Open

Neobanking platform Open has raised around $62 million in what appears to be a Series C round from Temasek, Google and existing investors such as Tiger Global Management and 3one4 Capital. 

The fresh fund has come after a gap of two years for the Bengaluru-based startup which raised a $30 million Series B round led by Tiger Global in June 2019.

According to the company’s regulatory filings, it has raised Rs 455.7 crore or $62 million from four investors: Arvon Investments, a subsidiary of Singapore’s sovereign wealth fund Temasek, Google International, Tiger Global and 3one4 Capital.

Break up of Series C, valuation and founders’ stake

Temasek has put in $35 million followed by Google, Tiger Global and 3one4 Capital which pumped in $15 million, $7.5 million and $5 million respectively.

It’s worth mentioning that the four-year-old startup was also in talks with General Atlantic, Visa and Amazon to raise around $100 million at a valuation of $600-700 million. The company is likely to mop up more funds in this round.

According to Fintrackr’s estimates, Open has raised the funds at a post-money valuation of around $480 million. It’s a more than three-fold jump in the company’s valuation which stood at $150 million during the Series B round two years ago. 

Following the fresh allotment of shares, Open’s promoters including Anish Achuthan, Mabel Chacko and Deena Jacob hold around 25% of the company.

Biz model and competition

Open offers digital banking services such as current account services, credit cards, debit cards, payments, accounting and expense management in partnerships with banks for startups and small and medium enterprises (SMEs). 

Apart from opening up new bank accounts, the company also offers its services such as expense and payroll management, payment gateway, invoicing among others to the existing account holders. Open Bank also helps B2B and SaaS companies to integrate the aforementioned solutions (via APIs) around their core business.

The company claims to have over 1 million registered users on the platform and adding 60,000 new small businesses and startups every month.

Earlier this year, Open had also acquired Optobizz, a goods and services tax and financial automation startup for $5 million in a stock-plus-cash deal.

While there are several neo-banking platforms operating in India that cater to SMEs, Neo Bank majorly competes with Razorpay X. In the APIs business, it competes with the likes of Setu, Decentro and Yap among others.