Indian neobank Niyo raises US$ 100 million and exceeds 4 million customers – Techdoxx

Deepak Gupta February 24, 2022
Updated 2022/02/24 at 6:49 AM

India’s Niyo has raised $100 million in a new round of funding as the consumer-focused neobank platform looks to add loans and other features to its offerings and make deeper inroads into the world’s second-largest internet market.

Accel and Lightrock India co-led the Series C funding round for the Bangalore-based startup. Existing investors Prime Venture Partners, JS Capital also participated in the round, which brings the startup’s all-time raise from six years to around $150 million.

Niyo provides digital savings accounts and other banking services to largely salaried individuals in India. He works with banks to help them deliver a more modern and expansive user experience and features.

It also operates a wealth management product to help users invest in mutual funds and domestic equities. Some of its most popular features include zero percent forex markup and something called “invest the change”, which rounds up a client’s spend and invests a portion of it.

Niyo Co-founder and chief executive Vinay Bagri told Ploonge in an interview that the startup has amassed more than 4 million customers across its banking and wealth management products. Most of these customers are in their 20s and 30s, he said.

A look at neobanks in India and the banks they have partnered with to serve customers. (Data: Companies and Jefferies. Image credits: Jefferies.)

The startup said it is adding more than 10,000 new users each day and is processing more than $3 billion in transactions on an annualized timeframe. Virender Bisht, co-founder and chief technology officer at Niyo, said the startup has been seeing “great tailwinds for digital financial products” since the start of the pandemic.

“Launched less than a year ago, our first product offering ‘NiyoX,’” he said, “is democratizing the superior digital banking experience for users and has witnessed tremendous user adoption.”

Niyo plans to offer loans to customers starting next month. The size of the loans will be in the range of ₹70,000 (US$930). As it broadens its offerings, it also seeks inorganic growth through acquisition opportunities, said Bagri.

Dozens of startups are trying to modernize the banking experience in India. But the challenge they face is that, unlike in many countries, banking is very affordable in India, which has made it difficult for them to persuade customers to make what is a considerable change.

As an industry executive described to Ploonge, the current generation of neobanks is largely just offering a “layer of experience” to customers. But many startups hope that India will soon give them a license to own and operate their own digital banks.

“We are excited to support India’s fastest growing neobank, Niyo. Vinay, Viren and their team have built a fantastic product with a clear value proposition for customers, which is reflected in their phenomenal growth. We look forward to partnering with Niyo to change the way India does banking,” said Anand Daniel, partner at Accel, in a statement.

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