Singapore’s Temasek set to lead $100m funding in Indian neobank Open

Photo: Reuters

Singapore’s state investment firm Temasek has signed a term sheet to lead a $100-million funding round in Bengaluru-based neobank Open, sources privy to the development told DealStreetAsia.

The SME-focused neobank is also in talks with other investors including Tiger Global to raise the aforesaid amount. The round could also see the participation of homegrown venture capitalist 3one4 Capital. Both Tiger Global and 3one4 Capital are Open’s existing investors.

“Temasek has been finalised as the lead investor…..others are still negotiating the deal with the company, which is expected to be finalised in a month’s time,” one of the persons mentioned above said on condition of anonymity. “This is likely to be a $100-million oversubscribed round.”

Post investment, the startup is expected to be valued at over $600 million.

When contacted, the Temasek spokesperson and Open co-founder and COO Mabel Chacko declined to comment on the development. Meanwhile, separate emails sent to Tiger Global and 3one4 Capital did not elicit any response.

Founded in 2017 by serial entrepreneurs Mabel Chacko, Ajeesh Achuthan and Anish Achuthan, Open offers a neobanking platform that helps over 10,00,000 SMEs and startups to automate and run their finances effectively. The startup claims to have all the tools that help businesses send and receive payments, automate their accounting, expense management, combined with developer-friendly APIs that help SMEs integrate banking into their business workflows.

Open had last raised $30 million in its Series B round led by Tiger Global about two years ago. In total, it has garnered a total of $35 million in funding so far and its other investors include Speedinvest, Beenext, Recruit Strategic Partners, AngelList, Unicorn India Ventures, and Tanglin Venture Partner Advisors, among others.

Over the last three years, India has seen the rise of neobanks with firms mushrooming to ride on the growth story. These include names such as 811 by Kotak, Yono by SBI, RazorpayX, and NiYo, among others.

A neobank is a new-age bank that provides financial services to customers but operates online and has no physical existence anywhere. Overall, the growth of neobanks in India and globally has been accelerated by the pandemic.

Last week, Novo, a neobank for small businesses, startups and freelancers raised $40.7 million in its Series A funding round from Valar Ventures along with Crosslink Capital, Rainfall Ventures, Red Sea Ventures and BoxGroup.

Meanwhile, in May, epiFi raised $12 million in its Series A round from its existing investors Ribbit Capital and Sequoia Capital. A month prior to that, Razorpay raised $160 million in its Series E financing round at a valuation of $3 billion. The funding was led by Sequoia Capital India and Singapore’s sovereign wealth fund GIC. In a statement, the company said that its banking platform, RazorpayX, saw 400 percent growth in transaction volume in the last 12 months of COVID.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.