Google-backed neobanking startup Open turns unicorn

Neobanking platform Open has raised $50 million in its Series D round was led by India infoline (IIFL) with participation from existing investors Temasek, Tiger Global and 3one4 Capital. 

With this, the startup has also restarted the Unicorn assembly line which had stuttered to a stop by March-end this year. Open is the 16th unicorn of 2022 and the first from the neo banking space.

In March, Games24x7 turned unicorn while the ecosystem didn’t see any unicorn in April. It’s worth noting that April was the only month in the past 15 months in which the Indian startup ecosystem didn’t churn any unicorn.

As per the company, it has raised the fresh funds at a post-money valuation of $1 billion. Six months ago, the Bengaluru-based startup had raised $100 million Series C round led by Temasek.

Open’s valuation recorded almost a 2X jump in this round as it was valued at around $500-520 million in Oct, as per Fintrackr’s estimates.

The fresh proceeds will help Open to accelerate its new product offering on SME lending, as the platform is gearing up for the launch of three new products: Open Flo -  a revenue-based financing product for e-commerce businesses, Open Settl – early settlement credit offering and Open Capital – working capital lending offering for SMEs.

The fresh funds will also be used to strengthen the leadership team and hire 500 employees, said Open in a release.

Open claims to power more than 2.3 million SMEs and process over $30 billion in annualized transactions. As per the press release, it targets to disburse $1 billion in lending through the new suite of products on the platform in the next 12 months.

Open’s Series D round was in the making for a while and it appears that the fundraising wasn’t an easy one for the five-year-old company. This is also evident from the size of the Series D round which is half of its previous financing round.

While the company’s valuation has surpassed $1 billion mark, it has posted a meagre Rs 5.6 crore in operational revenue in FY21, as per its annual financial statements with the Registrar of Companies (RoC). Open’s losses increased 55% to Rs 65.6 crore in the fiscal year ending March 2021.