Exclusive | Neobank Open Set To Enter Unicorn Club With New Funding Of $ 100-150 Million

Bangalore: The unicorn rush continues even into the final days of the year, with another startup on its way to joining the not-so-rare club of companies valued at $ 1 billion and above. Sources told ET that the Google-backed neobank Open is at an advanced stage in talks to close a new $ 100-150 million funding round, after which it will be valued at around 1.1 to 1. $ 3 billion.

If the deal goes through, Open’s valuation will more than double in the two months since it closed its previous $ 100 million fundraiser from Temasek, Google, Visa and others in October. At the time, the Bengaluru-based company was valued at $ 500 million.

The Qatar Investment Authority (QIA) sovereign wealth fund is among the investors who have held talks with Open, the sources said. The company has also received a term sheet from existing funders like Tiger Global and Temasek to co-lead the new round, people briefed on the matter said. A condition sheet is a non-binding agreement detailing the terms and conditions of a potential investment agreement.

“QIA put out a terms sheet, but they usually write bigger checks while leading the round. So Open can also do a secondary stock sale in this round and in this case the funding amount can reach $ 150 million, ”one of the people said.

An Indian private equity firm was also in talks with Open to participate in the round, but it is unlikely to continue, one of the people said. “Tiger, being an existing investor and known for his aggressive nature in supporting fast-growing companies, has also had talks to co-lead the new round. The final construction of the tower will be decided in about a week, ”added the person.

Open co-founder and CEO Anish Achuthan declined to comment on the matter. An emailed query to QIA did not elicit an immediate response.

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Earlier this month, Open acquired the consumer neo-banking platform Finin in a $ 10 million cash and stock deal. Open will use Finin to strengthen its corporate activities and take them overseas in a meaningful way after the deal, Achuthan told ET. Created in 2017, Open offers a neo-banking platform that integrates all the tools used by small businesses with a professional current account. Mabel Chacko, Ajeesh Achuthan and Deena Jacob are the other co-founders of Open.

The company has around 2 million SMEs on its platform and processes over $ 24 billion in gross transaction volume per year. Open said earlier this month that it adds 90,000 small businesses to its platform each month.

Ahead of its funding in October, Open has grown nearly 10 times over the past 18 months as the Covid-19 pandemic has pushed digital adoption by small businesses.

Open competes with other neo-banks such as RazorpayX, a payment unit of the Razorpay company. Paytm and Amazon have also entered this space.

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