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NiYO raises $13.2 M from Silicon Valley investors to introduce credit and wealth management products

Tarush Bhalla
10th Jan 2018
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NiYO solutions is the second company in Prime Venture Partner’s portfolio, apart from Ezetap where Silicon Valley-based Social Capital has invested. 

On Tuesday, Bengaluru-based fintech startup NiYO announced that it had raised close to $13.2 million in Series A funding from Silicon Valley-based Social Capital, family office of Jonathan Soros, JS Capital LLC and Horizon Ventures. Existing investor, Prime Venture Partners also participated in this round.

The company had earlier raised a seed round of $1 million from Prime Venture Partners in July last year.

NiYO stated that this round will be used for customer and geographic expansion; hiring across the technology and product teams as well as to foray into newer categories of credit and wealth management.

With this fresh capital infusion, the firm is looking to reach more than a million users (across 5000 corporates), while growing its 25-member technology and product team to almost 75 members by the end of 2018. Being present in Bengaluru, New Delhi, Mumbai, and Hyderabad, the firm also plans to spread its geographical presence across 38 Tier 1 and 2 cities of India, by the end of this year.

Founders of NiYO (L to R) - Virender Singh and Vinay Bagri
Founders of NiYO (L to R) - Virender Singh and Vinay Bagri

Founded in 2015 by Vinay Bagri and Virender Bisht, NiYO is an alternate payments mechanism for the salaried to help them increase their cash flows through claiming tax- saving allowances on the CTC disbursed by the employer.

In partnership with DCB and YES Bank, NiYO comprises of a corporate portal for salary disbursal, payroll card to receive salary and spend on ATM/POS/Online. It also includes a mobile app to track transactions and do basic banking functions like fund transfer etc

Apart from just tax benefit, today, the company also doubles up as a solution for a salary account, additional benefits (and allowances) given by the company to employees (above their CTC); and official expense holder (for office related expenditure).

At present, the company has close to 500 corporates using their solution, while being used by close to 107,000 salaried employees across.

According to the founders, the company currently seems to be adding 700 employees on a daily basis and is seeing close to 3 lakh transactions on their network every month. Ten percent of the company’s customers are MNCs or enterprises while the rest 90 percent are SMEs and MSMEs with an employees strength of 100 to 150 employees.

Further, the founders state that at present, 70 percent of their sales (or customer acquisition) comes through direct sales while the rest (30 percent) is through banking partners. Over the course of the year, the company plans to strengthen their channel partnerships, targeting at 70 percent customer acquisition through channel partners.

Speaking on the investment, Vinay Bagri, CEO and Co-founder of NiYO, said,

“We had started speaking to Social Capital and other foreign investors in 2016 itself. They found the solution interesting, and were eager to see the traction it received. Looking at the big fintech hubs (in the world) we were also wanted strategic investors which would also help us take some of our offerings international.”

While, Arjun Sethi, Partner, Social Capital, said,

"NiYO is digitising the entire employee payroll and benefits value chain, making the process easier and more transparent for employers and employees alike. This is an area that hasn’t seen much innovation in the Indian technology ecosystem, despite the massive addressable market. We believe that India is on the brink of unprecedented consumer consumption, and that movement begins with infrastructure that manages people’s earnings in a reliable and modern way.”

Sanjay Swamy, Managing Partner, Prime Venture Partners, also said,

“The combination of smartphone penetration and IndiaStack makes the timing right for NiYO’s patent-pending innovations to come to market. We are privileged to be associated with this stellar team from the start of their journey and be part of their vision to disrupt the payroll landscape.”

Revenues

The founders state that the company makes its revenues through an annual fee and commissions on transactions made through their card. NiYO charges an annual fee of Rs 200 for using their card and takes a commission of 0.75- 1 percent on every transaction made through their platform.

Further, for transactions in corporate food courts, the company can make a commission of two percent on every transaction made through their card.

However, the company declined to share any revenue indicators.

The coming year

In the next six months, the company plans an aggressive foray into credit and wealth management products for their customers. Vinay explains,

“Over the next six months, we plan to introduce tax saving Mutual funds, ELSS and SIPs on the platform. This further allows us to be a full-stack tax planning solution for the salaried class. For our credit product, we will be introducing small credit limits for our customers just like credit cards and then increasing them overtime, based on the credit and repayment history.”

Speaking of targets, the company is hopeful to sell these services to at least 20 percent of their total consumer base by the end of 2018.

The company is also looking to introduce an international travel card, which will work exactly like an international debit card, but not charge customers any conversion fee.

Currently, every financial institution is looking to have a cross-selling strategy in place. Just today, Paytm announced the launch of its wealth management subsidiary Paytm Money which looks to sell Mutual funds to its large customer base. In November last year, the company entered into the lending domain, in partnership with ICICI Bank and launched their short-term credit product, ‘Paytm ICICI Bank Postpaid’.

In August last year, even MobiKwik had announced its partnership with NBFC Bajaj Finance to empower consumers to avail credit facility through the wallet, enabling them with an instant purchase and payment option.

They created a separate app, ‘Bajaj Finserv Wallet’, and the joint entity is offering loans at zero-percent EMI. Flipkart’s PhonePe also has audacious plans to launch credit and wealth management plans for its customers.

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