Kerala got its first unicorn startup as fintech firm Open Financial Technologies, supported by Kerala Startup Mission (KSUM), raised $50mn from Mumbai-headquartered IIFL Finance in its Series D funding round.
A neo-banking platform for SMEs, the Kerala-based startup is also India’s 100th unicorn, entering the elite club with a valuation of $1 billion.
“This is indeed a proud day for Kerala startup ecosystem,” Chief Minister Pinarayi Vijayan said in a video message.
The Chief Minister said he was glad that as a tribute to the startup ecosystem in Kerala and in the spirit of giving back to the state, Open has decided to set up a fintech accelerator and finishing school in collaboration with KSUM to support startups coming up with fintech solutions.
“I believe this is just a beginning and that more unicorns will arise from Kerala and contribute to India’s quest to emerge as world’s largest startup ecosystem,” Vijayan said.
The Chief Minister added that the company has proposed to invest Rs 200 crore over the next five years as part of the Centre of Excellence and fintech accelerator programmes to bolster the state’s startup ecosystem.
The Series D round also saw participation from Open’s existing investors, including Singapore’s sovereign wealth fund Temasek, US hedge fund Tiger Global, and 3one4 Capital. So far, Open has raised $140mn in funding.
Founded by Anish Achuthan, Mabel Chacko, Deena Jacob and Ajeesh Achuthan in 2017, the startup has partnership with over a dozen top banks in India. Open has also built Asia’s first digital banking platform for SMEs, startups, and freelancers.
Earlier, Open had got an early-stage fund of Rs 2 crore under KSUM’s Fund of Funds programme.
Noting that Open’s achievement is a proud moment for the state’s startup ecosystem, John M Thomas, CEO, KSUM, congratulated the founders, and said their achievement would bolster the confidence of startups in their efforts to break into new vistas of technology with their unique ideas.
“Open has proved the importance of providing innovative services and sustaining in-depth focus to attain growth in its niche sector. Kerala’s fintech startups can emulate Open’s success story. Their bagging of the top-notch honour in a highly competent milieu is a prime model for their peers,” he added.
Open will use the fund to accelerate its existing product offerings— Zwitch (embedded finance platform) and BankingStack (enterprise banking solution for banks), to drive global expansion and reach over five million customers within the next year.
The fintech startup will also use the capital to ramp up its leadership team, and increase its employee headcount from 500 to 1,000 within the year.
Currently, Open is gearing up for the launch of three new products in the SME lending space: Open Flo (a revenue-based financing product for ecommerce businesses), Open Settl (an early settlement credit offering), and Open Capital (working capital lending offering for SMEs).
Open’s platform adds over 20,000 SMEs every month, making it the fastest growing SME focused neo-banking service globally. It is planning to expand to international markets such as Southeast Asia, Europe, and the U.S.
KSUM is the nodal agency of the Kerala Government for entrepreneurship development and incubation activities in the state.