NiYO Solutions, a Benglauru-based neo-banking startup has raised $35 million in a Series B funding round. The round was led by Horizons Ventures and Tencent. While, the company’s existing investor JS Capital also participated in the funding round.
The company plans to use the funding to accelerate the development and rollout of new product offerings. It will also use funds to amplify distribution and marketing.
Vinay Bagri, cofounder and CEO, NiYO, said, “Our core focus on customer value and customer service is paying rich dividends with strong growth across business metrics in the last 12 months. With this fresh round of funding we aim to fortify our service suite and further accelerate our growth.”
NiYO Solutions was founded by Vinay Bagri and Virendra Bisht in 2015. The startup aims to create a technology enabled and value-added product & service offering layer over the existing banking infrastructure, to offer a comprehensive digital banking proposition to its retail and SME customer base.
It is also looking to explore expansion into international markets, particularly in emerging economies which offer similar opportunities for digital disruption through a “Neo-bank” concept.
Till date, the total funding raised by NiYO is $49 million.
At present, the fintech startup offers two kinds of products: Benefits and Payroll. Both of these products are intended primarily for white-collar employers and corporates.
The company claims to be serving around 1million users and 5,000 corporates. It employs around 800 people. With increasing demand and available war chest for rapid expansion, NiYO aims to service 5 million users in next three years.
“From our first meeting with Vinay and Viren, we were excited by the vision of bringing ‘neo-banking’ experience to the blue collar segment – helping drive the benefits of digitization, financial inclusion and to the hard-working masses in India, “Sanjay Swamy, managing partner, Prime Venture Partners, said.
In India, neo-banking is slowly gathering the industry’s attentions. Startups in this sector will have to comply with the regulations under the Payments and Settlement act. They keep the customer’s money in the nodal bank account of the bank with which they have tie-ups.
While, according to a 2017 report by Allied Market Research, the collective customer base of neo banks is expected to grow at a CAGR of 50.6% from 2017-2020. Some of the startups exploring neo-banking include DBS, Open etc.
A report by NASSCOM further forecasts the Indian fintech software market to touch $2.4 billion by 2020, from the current $1.2 billion.