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Google-backed neobank Open acquires Finin in $10M deal: Here’s what happens next

Open
Open

In the last 4-5 years, the banking business has been transformed by changing consumer habits that rely significantly on digital platforms. are beginning to face stiff competition from new and developing neo-banks that provide rapid, accessible, and cross-border financial services via an app on a mobile phone.

Neo-banks are basically digital banks that do not have physical branches and instead provide all financial services to its customers via applications that can be accessed via a smartphone. Unlike traditional banks, they require less documentation, are inexpensive, charge minimal to zero transaction costs, and are borderless. They are also known as challenger banks since they have disrupted the entire traditional banking industry with a tech-driven alternative banking strategy.

The Acquisition

Meanwhile, Open, a Bengaluru-based neobanking platform, has acquired Finin, a consumer neobanking platform, for $10M in cash and stock deal. Open, which received $100M in October from Temasek, Google and others, will use Finin to develop its enterprise business and expand it significantly internationally following this transaction.

Key leaders from the startup, including founder and CEO Suman Gandham, will also join Open.

In February, Open had acquired goods and services tax (GST) and financial automation startup Optobizz for $5M in a stock-plus-cash deal.

Finin, which launched in 2019, was one of the first consumer-focused neobanks to provide a savings account to customers. Finin was founded by Suman Gandham and Sudheer Maram and is backed by Unicorn India Ventures and other angel investors.

On the other hand, Anish Achuthan, Mabel Chacko, and Ajeesh Achuthan, along with ex-TaxiforSure CFO Deena Jacob, formed Open in May 2017. The startup provides advanced digital banking services tailored to small enterprises. Today, more than a dozen institutions use Open’s infrastructure to provide banking services. Open currently has 14 bank partnerships in India and a few more in Southeast Asia.

“Our enterprise solution is in high demand in India, with 14 Indian banks adopting it to run their SME neo-banking systems.” We are seeing interest from countries like Vietnam and the Philippines, and the Finin acquisition will help us there,” cofounder Achuthan explained.

Namaste Credit, NiYO, Hylo, PayZello, YeLo, Finin, and RazorPay X are among the neobanking startups that compete with Open.

Open Future Plans

According to Achuthan, Open will continue to focus on its enterprise products to banks without creating a consumer-focused neobanking service. “Direct-to-consumer isn’t in our DNA,” he explained. “However, we may supplement some B2C functions as part of our SME solutions, such as payroll management.”

“When we originally launched Finin, I told my team that we would make an impact in the fintech industry and demonstrate to Indian consumers what neo-banking can truly accomplish for them,” said Suman Gandham in a statement.

The acquisition will also help Open’s no-code embedded financial platform Zwitch, according to the company.

“The result of a consumer-facing neo-banking platform collaborating with a B2B (business-to-business) neo-banking platform will be exemplary, as we will be able to add a lot of value to Open’s SMEs looking to open salary accounts for employees, expose consumer banking rails to fintechs via Open’s embedded finance platform Zwitch, and also add value to banks looking to launch digital banking propositions via Open’s cloud native digital banking,” Gandham further added.

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