India now counts a total of 100 unicorns. The Bengaluru-based neobank Open joined the exclusive club on Monday with a new investment round, according to the company.
The five-year-old company didn’t say how much money it raised in its Series D round, but a source familiar with the situation said it was around $50 million. According to the two, Mumbai-based investment firm IIFL led the fresh round, which valued Open at $1 billion. The financing included existing investors Tiger Global, Temasek, and 3one4 Capital, and comes just seven months after Open announced its Series C funding at a $500 million value. To date, Open has raised over $187 million.
Open operates a neobank that provides small and medium-sized organisations and enterprises with nearly all of the capabilities of a bank, as well as additional tools to meet their needs. In India, millions of small and medium-sized enterprises struggle to keep track of several bank accounts, keep track of daily expenditures, and distribute payments to employees.
More than 2.3 million businesses in India use the startup, which has connections with over a dozen prominent banks, according to the company. Each year, Open handles about $30 billion in transactions.
In recent quarters, Open has broadened its offers. In a white-label licence agreement, the business now provides its neobanking technology to banks, who subsequently sell it to their customer base.
The rise of Open in recent years, which has prompted several other firms to enter and innovate in this space, has altered the relationship between banks and fintechs dramatically. Most Indian banks were wary about neobanks just a few years ago, and fintech innovators said it was impossible to persuade any of them to partner.
Open said it plans to launch three new products in the next months to enhance its client offerings: revenue-based financing Flo, early settlement card providing Settl, and working capital loan Capital. Within the next 12 months, the startup hopes to disburse $1 billion in loans through its new offerings, according to the company.
“We are excited to partner with IIFL and existing investors Tiger Global, Temasek and 3one4 Capital for our series D round. 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,” stated Anish Achuthan, co-founder and chief executive of Open, in a statement.