Neobanking startup Open has raised $100 million in its Series C round. The round led by Temasek was joined by Google and SBI Investment and saw participation from existing investors Tiger Global and 3one4 Capital.
Open plans to use the funding to further strengthen and accelerate its new product lines, said the company in a statement. It further added that it will expand its base to 5 million SMEs and expand to global markets like South East Asia, Europe and the US.
Open has raised the funds at a post-money valuation of around $500-520 million, as per Fintrackr‘s estimates. 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.
Four-year-old 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 claims that it processes $20 billion in transactions annually and powering business payments for close to 2 million SMEs currently.
The company has been operational in India for more than 4 years but is yet to post significant revenues while amassing outstanding losses of nearly Rs 51 crore.
According to Fintrackr, Its revenue from operations grew 2.7X to a little over Rs 7.6 Lakhs in FY20 while annual losses have ballooned 6.7X to over Rs 42.2 crore during the same period. On a unit level, Open spent Rs 670.4 to earn a single rupee of operating revenue during the fiscal ended in March 2020.
Among neo-banking platforms that cater to SMEs, Open directly competes with the likes of Chqbook and PayO, Razorpay X among a few others.
A month ago, Open had raised a larger part ($62 million) of this round following which the company’s promoters including Anish Achuthan, Mabel Chacko and Deena Jacob had around 25% of the company. The founders may dilute more stake after closing this round.