Teen-centered neo-banking platform Akudo is winding up its operations this month, according to an in-app notification sent to its customers. The shutdown is an outcome of Reserve Bank of India (RBI) direction which disallowed Unified Payments Interface (UPI) in a co-branding arrangement.
“Akudo wallet will be shut down on Dec 31, 2023. Please take an immediate note of this and withdraw your funds and wallet balance as soon as possible,” the company told its users via an in-app notification.
Queries sent to Akudo didn’t elicit any immediate response.
The termination of its core card and UPI businesses was imminent as Akudo ceased to onboard new users and communicated its PPI issuer LivQuik and infra partner M2P Fintech about it in September. Entrackr had exclusively reported about the potential shoutdon.
RBI directed PPI issuers to stop UPI in a co-branding arrangement through a master direction in June 2023. The apex banking body decision forced DreamX, Muvin and others to halt UPI services as they didn’t hold PPI license.
For the uninitiated, Akudo used to be a digital bank for teenagers and provided debit cards which could be managed by parents. The firm raised $4.2 million led by Y Combinator, JAFCO Asia, Incubate Fund India and AET Fund, Tribe Capital, Cabra Capital and a few angels in September 2021.
Teen-focused neo-banking segment was in the spotlight during the pandemic (H2 2021) with Fampay mopping up $38 million and Junio closing seed round in the same year. However, the posterboy of the segment Fampay didn’t manage to raise any follow-on capital and has been struggling to build a notable scale.
After Akudo’s shutdown, the space is largely left with firms like Junio and Fampay.