HDFC Bank takes 5.2 percent stake in Mintoak Innovations
India's largest private bank has signed a definitive agreement to invest Rs 10.3 crore in the four-year-old startup.
India's largest private bank HDFC Bank invested Rs 10.3 crore in Mintoak Innovations, a startup in Mumbai with operations in India and Kuwait, on August 21.
Post investment, HDFC Bank will hold 5.2 percent of Mintoak on a fully diluted basis, which pegs the latter’s enterprise value at a little over Rs 197 crore.
Incorporated in September 2017, Mintoak clocked revenue of Rs 2.13 crore in fiscal year (FY) 2021, growing 255 percent over the previous year. However, it reported a net loss of Rs 1.18 crore.
Mintoak (pronounced 'mint-oak') is a SaaS product for banks to engage with merchants on their platforms. Its software features and capabilities are embedded in the banks' customer-facing products, which range from point of sale (POS) devices to mobile apps, to improve the merchants' digital experience.
Mintoak has signed up six banks, including HDFC Bank, which pay it a licensing fee for the SaaS product. Through the banks, Mintoak has reached 150,000 merchants, with a monthly growth rate that ranges between 20 percent and 30 percent.
It employs a little over 50 people with plans to double the headcount by the end of this fiscal year.
For HDFC Bank, the Mintoak investment helps it stay relevant to micro, small and medium-sized enterprises, and enhance its merchant engagement by offering more competitive products and services.
Higher engagements allow the bank to pick and choose their offerings that can be tailor-made for the merchants, seamlessly.
In HDFC Bank's latest annual report, Sashidhar Jagdishan, CEO of HDFC Bank, said it will foster innovations in the product and consumer experience domain by building on its own, or collaborating with new age fin-tech and big-tech companies.
HDFC Bank and fintech company Paytm also entered a partnership recently to launch digital payments, lending, and PoS-related products, to accelerate fintech adoption in semi-urban and rural parts of India.
Under this deal, HDFC’s retail products and network will be combined with Patym’s tech platform.
Earlier this year, HDFC Bank has made two minority investments in fast-growing companies. Its subsidiary HDFC Securities has a 7.2 percent stake in Pune-based Virtuoso Infotech.
The bank also has a 7.76 percent stake in Bengaluru-based Borderless Softtech, which manages the backend tech infrastructure platform to facilitate global fractional investing in US listed stocks, funds and exchange traded funds.