Consumer neobanking company Niyo, operated by Finnew Solutions, on Thursday said it has racked up $100 million in a Series C funding co-led by Accel and Lightrock India.
The round also saw participation from Beams Fintech Fund, with existing investors including Prime Venture Partners and JS Capital, among others.
Niyo’s bet marks Beams Fintech Fund’s first investment. It also claims to be India’s first growth stage fintech fund.
The platform will be using the fundraise across marketing and branding, to expand distribution footprint as well as onboarding more employees. The company, however did not disclose the valuation of the latest round and the entire process was a primary share sale.
The company is also eyeing to roll out a slew of new products and plans 25% bet on technology to ramp up its existing items portfolio, Co-Founder and Chief Executive Officer, Vinay Bagri told VCCircle.
“We are building a lending stack, which includes credit cards, personal loans and buy-now-pay-later (BNPL) cards, and a major portion of the funding will go there. We are also launching a fully digital salary account,” said Bagri.
“Today a salary account is dependent on your employer and so most of the benefits are linked to which company you work for. We want to get away from that kind of model and offer salary accounts irrespective of which company you work for. So, that comes with a zero-balance account and all the so-called benefits which you get for a salary account,” Bagri added.
Niyo’s lending forays come at a time when competition for digital lending is heating up with demand for loans expected to rise post the pandemic.
Not just neobanking platforms, but traditional banks like ICICI Bank, SBI’s Yono among others, are bolstering their technology platforms in a bid to capitalize on the rising digital adoption in the country.
Many new-age fintech services companies, too, are aggressively adding lending products to their range in a bid to provide an integrated digital banking platform to users.
“Over the last couple of years, customers were careful in taking loans because they were not sure how things will pan out and will they be able to service it or not. Similarly, the lenders were also very careful in trying to assess the situation, and were not taking unnecessary risks. With pandemic now easing out, both the parties will become more aggressive in chasing the targets or dreams,” said Bagri.
Bagri also said that the company is looking to expand inorganically, without giving any further details, but said that it will look to acquire companies to enhance Niyo’s technology and add more products to its offerings. Bagri said that the company will not look to acquire companies just to expand its customer base.
Neobanking platforms like Niyo need to partner with a traditional bank for a banking license to offer banking products as they do not have one of their own.
Niyo has partnerships with five banks--YES Bank, ICICI Bank, SBM Bank, DCB Bank and Equitas Small Finance Bank. Bagri said that the company currently offers travel products and other banking products to consumers along with prepaid products for blue collar employees.
Equitas, DCB and SBM Bank provide travel and other consumer banking products with Niyo, while YES Bank and ICICI Bank provide prepaid products to blue collar workers through Niyo, Bagri said.
Niyo, founded in 2015 by Bagri and Virender Bisht, has offices in Bengaluru, Mumbai and Delhi. The company currently has 500 employees and claims to have presence in more than 20 states and union territories. NiYO Inc, the holding company of Finnew Solutions Pvt Ltd, is based in the US, while Finnew Solutions looks after the Indian operations. However, Niyo has no operations outside India, Bagri said.
Bagri claimed that Niyo has customers across 17,000 pincodes in the country.
He added that the platform will be profitable by 2023-24 (FY24) on a company level. For 2020-21 (FY21), Niyo had reported a loss of Rs 79 crore on a revenue of Rs 24 crore. To be sure, the company’s revenue had dipped slightly from Rs 25 crore in 2019-20 (FY20).
Avendus Capital was the exclusive financial advisor to Niyo on the transaction.
