[HS Exclusive] Meet Mabel Chacko and Deena Jacob, the women co-founders behind India’s 100th unicorn, Open

On May 3, Open Financial Technologies became India’s 100th unicorn after the startup raised $50 million from Mumbai-based IIFL Finance in its Series D funding round.    

Registered in Malappuram, Kerala, with its headquarters in Bengaluru, Open was founded in 2017. It is Asia’s first neo-banking platform for SMEs (small and medium enterprises) and startups.

And at the helm of Open, among its four founders —  Anish Achuthan, Mabel Chacko, Deena Jacob, and Ajeesh Achuthan — are two women entrepreneurs  Mabel Chacko and Deena Jacob. 

Mabel, who is the COO of Open, is a serial entrepreneur with more than 15 years of experience in the fintech space.

Deena, the CFO of Open, was previously the CFO of Tapzo and the Head of Finance at TaxiForSure.

Open is the fifth startup with a woman founder/co-founder to enter the unicorn club in 2022, and the fifth overall among the 100 unicorns India has birthed so far. 

HerStory reached out to Mabel and Deena to learn more about Open’s growth as Asia’s largest neobank, their journey to to the unicorn club, the startup’s joint venture with IIFL, and starting out early in the ecosystem.

Elated by the unicorn status, the two women entrepreneurs tell us that while celebrations are on, they are also grounded by the thought of what more needs to be done.

“We are overwhelmed by the wishes pouring in from everyone – our families, staff, our former staff, vendors, and customers. It feels like a Diwali or Christmas celebration,” says Mabel.

Celebration beyond valuation

Deena believes this celebration goes beyond valuation.

“We see this as a mark of what we were able to do for the SME community. We are also happy that India finds itself at a certain pedestal in the entire global startup scenario and we are happy to be a small part of it,” she says.

While they definitely believe it’s a landmark moment, they are also aware of the responsibility it entails. “There’s a long road ahead of us, a lot more responsibility on our shoulders than ever before. We will take it with a bow, move on to better things we set out to do.”

As a leading player in the fintech space, which has been able to crack a tough and heterogeneous SMB market, Open has been able to build different products for different users. This has contributed largely to their success.

Simply speaking, Open is a neo-banking platform that helps SMEs automate their business finances by integrating banking with all tools needed to collect, send and reconcile payments, manage payroll and expenses, automate accounting, and avail credit to grow their business.

According to Mabel, it’s all about listening to customers and building products according to their needs. 

“This has been our secret sauce apart from our amazing team that understands our vision, captures every bit of it, and executes it beautifully.”

Deena adds, “We have always believed in thinking and building from the first principles. We always kept our ears and eyes open for feedback. We have built all our products over the past four years based on customer feedback. And fortunately, we have had a lot of cheerleaders, within the company and outside.”

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Significant joint venture

The co-founders understood that with SMBs, the adoption of digital was tricky, especially when they were conservative with capital.

Deena agrees. “They are conservative when it comes to capital withdrawal — the money and time. I believe where we brought in solutions is in giving time back to them. This has led to widespread adoption, a journey that led us to touching 23 lakh users all over India, covering 80 percent of the pincodes with digital.”

With a new synergy arising from its partnership with IIFL, Open plans to launch new products in the market. The SME market in India, according to Deena, is still fragmented in its way of doing business and collecting money.

“This is where we really felt the need to disrupt — look at a system or product that caters to this segment efficiently. To this end, we have announced three new products, Open Settl an early settlement credit offering,  Open Flo, a revenue-based financing product and Open Capital, working capital lending for SMEs,” she says.

Through its joint venture with IIFL Finance, Open would get a recurring annual SaaS (Software-as-a-Service) fee per customer for offering technology services to the joint venture. Additionally, Open would also be able to leverage the lending book and infrastructure of IIFL Finance to offer innovative lending solutions to the merchants on its platform. 

The lending solutions can be offered by Open without taking any lending/First Loss Default Guarantee risk. The startup would get incremental revenue from fees generated for lending solutions provided.

Accelerating new startups

At the moment, the two co-founders are excited to mentor startups. Open is setting up a fintech accelerator in collaboration with Kerala Startup Mission to support startups with fintech solutions and the first cohort has six startups.

From agritech to pharma, the accelerator aims to get startups to take advantage of the potential of fintech as they grow and scale. This includes being able to embed financial services into their workflows, bring convenience to their customers, and build a robust business model.

Mabel shares that the cohort was originally supposed to incubate five startups, but a ‘wild card’ entry became the sixth and is aimed at bringing in social impact.

“Over the past two weeks, we have seen news in the Kerala media of a 33-year-old woman, Ashwathy, suffering from cerebral palsy selling lottery tickets, a 10-year-old, Dinesia who dropped out of school to help her mother sell pickles, and a differently-abled man, Sreekuttan who is a vlogger. We decided to get these special folks together to help them form a brand called Magicals. We are helping them with a grant of Rs 20 lakh, which will help them with a go-to-market strategy, branding, packaging, celebrity endorsements, and influencer marketing so it becomes a self-sustaining brand. And also, Dinesia will be able to go back to school,” she says.

Believe in your idea

Mabel and Deena also touch upon the aspect of fund-raising. Initially, they struggled as investors were not clear about what they were trying to do.

“We were the first neobank in Asia and no one understood the product we were building. We did face early mover troubles, but every round of fundraise brought with it a different challenge. Ultimately, our belief got validated with the execution and the kind of adoption and virality the product experienced,” says Deena.

Interestingly, Deena was pregnant during Open’s Series A and B rounds of funding. 

“While it was not a cakewalk, I would like it to say it was doable. All thanks to the incredible support I received from my other co-founders and the team,” she adds.

Mabel says that they encourage women to come back to work after delivery whenever they are ready. 

“We put in a lot of effort in retaining them in the workforce because sometimes all it needs is just a talk, where we listen and find a solution to a problem. It would mean having a day care facility at work, counselling sessions or just pep talk,” she says. 

Three of the co-founders in Open are family. Anish and Ajeesh are brothers and Mabel is married to Aneesh. 

Mabel believes the journey of building a startup is a tough and arduous one, and having “someone take on the pain along with you is fun.”

“Each of us is in this because of the skillsets we bring to the company. Aneesh brings in product and business strategy expertise, Ajeesh handles tech and Deena, with her financial background, came in as the perfect fit to the team,” she says.

“Great families make great businesses,” Deena says with conviction, adding, “It’s also about having the same values and dreams and working towards them.”

Their advice to other women wanting to start up?

Mabel points out that women are often self-critical and don’t appreciate themselves enough. “It’s important to give yourself a pat on the back,” she says, proceeding to pat Deena on her back.

“Follow your heart, don’t let gender bias affect you. If you find something compelling enough to start up, go ahead, find your support system and shine on,” says Deena.