The funding will be used to scale up the team as well as launch new products.
Open, a neo-banking platform for SMEs, confirmed on Tuesday that it had raised Series A funding of $5 million led by Beenext, Speedinvest and 3one4 Capital. Existing investors Unicorn India Ventures and Angellist Syndicate also participated in this round.
Confirming the news to YourStory, Open said it will be using the funds to scale up the team, while looking to launch new products. This includes a credit card for startups, which the company is looking to launch in March. The product is expected to be christened DUO.
Founded in 2017 by serial entrepreneurs Anish Achuthan, Mabel Chacko and Ajeesh Achuthan, along with ex-TaxiForSure CFO Deena Jacob, Open is solving business banking challenges faced by SMEs. The platform today has grown to over 30,000 SMEs and has been processing over $2 billion in transaction run rate.
The platform has been adding over 7500 SMEs every month.
Speaking on the investment, Anish, Co-founder and CEO of Open said,
“Banking is broken for small businesses as traditional business banking services have not focused on the needs of these businesses. This presents us with a large opportunity to disrupt this segment in partnership with banks. The funding will help us accelerate customer acquisition and growth as we target to onboard 1 million small businesses into the platform in the next two years.”
In May, last year, the platform had announced that it had raised pre-Series A funding in a round led by Unicorn India Ventures and Recruit Co. Ltd, through its investment subsidiary RSP India Fund LLC. The round was estimated to be around $2 million.
The company offers a business account in partnership with banks that helps SMEs automate and run their finances effectively. The account has tools that are required by a small business to send and receive payments combined with an automated bookkeeping tool to integrate banking into their business workflows.
Besides Open, European VC fund Speedinvest has also backed global neo-banks such as N26, Holvi and Tide in the past. Stefan Klestil, General Partner, Speedinvest, added,
“Tech is enabling the financial inclusion of small businesses everywhere in the world. Based on our track record in Europe, and together with Beenext, our trusted regional partner, we have started to back strong, proven founders like Anish in the Indian market with its practically unlimited growth prospects. We are very excited about our first tech investment in India."
Dirk Van Quaquebeke, Managing Partner, Beenext, who led the round said,
“I have been looking at the neo-banking space globally for the past 5-6 years and must say that I have not seen this kind of growth and robustness of an SME Neo product at this young stage of a company. I am deeply impressed by Anish and his team and what they have achieved in such a short period of time.”
Anish and Mabel have over a decade of experience in building disruptive fintech startups such as the branchless-banking startup Cashnxt (2009), NFC-payment startup Neartivity (2011), and the developer payment platform Zwitch (2014). The entrepreneur-couple’s previous venture Zwitch was acquired by CitrusPay in September 2015.