Digital banking startup Yelo has raised seed funding in a round led by multi-stage investor Matrix Partners India.
Existing investor Better Capital as well as Omidyar Network and Flourish VC also participated in the round, Yelo said in a statement. It didn’t disclose the amount it raised.
Better Capital is an early-stage investor focused on pre-seed, seed and pre-Series A investments in Indian startups, according to its website. Its portfolio includes digital banking startup Open and agri-tech startup Gramophone.
Flourish VC is a fintech-focussed venture capital firm that was spun out of Omidyar earlier this year.
Yelo is a neo-bank—a digital-only lender—focused on serving mass-market consumers with financial products to satisfy requirements such as remittance, healthcare, education, e-commerce and day-to-day cash flow management.
The startup, which is operated by Bengaluru-based 0.5Bn FinHealth Pvt. Ltd, will use the funds to expand its team and build local language offerings.
“By providing people with the right incentive structure and behavioral nudges, we can help get consumers ready to adopt digital financial services,” said Nilesh Agarwal, co-founder and chief executive officer at Yelo.
Yelo aims to personalise offerings to customers such as manufacturing and construction workers, security guards, truck drivers and farmers. It plans to provide a wide-range of services, from banking and payments, to credit and insurance.
The startup was launched earlier this year by Agarwal and Abhishek Challa. Agarwal, an alumnus of Indian School of Business, worked at Omidyar in the past as an investment associate for its financial technology and financial services investments. Challa, an alumnus of Birla Institute of Technology and Science (Pilani), was associated with Airtel Payments Bank and Happy Loan in the past.
“Their (co-founders) suite of products specifically designed to meet the requirements of the mass-market consumer in India is the need of the hour to bring financial inclusion to the ‘Digital India’ vision,” said Avnish Bajaj, managing director at Matrix Partners India.
Several digital banking startups have raised institutional funding in the recent past. For example, Bengaluru-based digital banking startup NiYO Solutions raised $35 million in a Series B round from investors including Chinese conglomerate Tencent in July.
In June, Tiger Global led a Rs 210 crore Series B funding round in Bengaluru-based Open, which provides collection and payout automation services for small businesses.