Google Open-backed neobanking startup becomes unicorn

Neobanking platform Open has raised $50 million in its Series D round, led by India infoline (IIFL) with participation from existing investors Temasek, Tiger Global and 3one4 Capital.

With this, the startup has also restarted the Unicorn assembly line, which was stopped at the end of March this year. Open is the 16th unicorn of 2022 and the first in the neobank space.

In March, Games24x7 became a unicorn, while the ecosystem did not see any unicorns in April. It is worth noting that April was the only month in the last 15 months in which the Indian startup ecosystem did not produce any unicorns.

According to the company, it has raised the fresh funds at a post-money valuation of $1 billion. Six months ago, the Bangalore-based startup had raised a $100 million Series C round led by Temasek.

Open’s valuation saw almost a 2X jump this round as it was valued at around $500-520 million in October, according to fintrackrestimates of .

The new revenue will help Open accelerate its new SME lending product offering as the platform prepares for the launch of three new products: Open Flo, a revenue-based financing product for e-commerce businesses, Open Settl, early settlement credit offer and Open Capital: working capital loan offer for SMEs.

The new funds will also be used to strengthen the leadership team and hire 500 employees, Open said in a statement.

Open claims to power over 2.3 million SMBs and process over $30 billion in annualized transactions. According to the press release, it aims to disburse $1 billion in loans through the new suite of products on the platform in the next 12 months.

The Open Series D round has been in the works for a while and it seems fundraising hasn’t been easy for the five-year-old company. This is also evident from the size of the Series D round, which is half of its previous funding round.

While the company’s valuation has passed the $1 billion mark, it has posted a meager operating income of Rs 5.6 crore in FY21, according to its annual financial statements with the Registrar of Companies (RoC). . Open’s losses rose 55% to Rs 65.6 crore in the fiscal year ending March 2021.

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