An Indian neobank called NiYO Solutions has raised $35 million in a funding round to grow the business and expand some products beyond the region, according to a report by TechCrunch.
NiYO has been around for about four years and is based in Bangalore. It caters to small and medium-sized businesses (SMBs) and helps employees with financial products and benefits offered by companies. The Series B funding round was led by Horizons Ventures, with help from Tencent and JS Capital. The company has raised $49.2 million so far and closed a $13.2 Series A in January of 2018.
A neobank is an institution that works like a bank and is backed by a traditional banking institution but also offers additional services, catering to a niche audience. NiYO serves blue-collar workers in India who struggle to get necessary financial products from banks that usually serve higher-income clientele.
NiYO wants to close the gap of financial inequality in the country. It also offers customers a worldwide travel card that doesn’t have a mark-up fee, and upwards of 50,000 people have signed up for it. NiYO wants to get that number up to 500,000 by next year. The travel card will also be brought to more markets, the company said.
With the new capital, NiYO is going to create new products and also put money into distribution and marketing. The startup wants to grow from 1 million users to 5 million in the next three years. The company will also be on the lookout for companies to acquire that can help its goal.
Neobanks are growing in popularity around the world as traditional financial institutions continue to ignore niche customer bases. In Europe, Tide and N26 are growing increasingly more popular. Azlo is a popular neobank in the U.S., and Volt Bank and Tyro are well known in Australia.
They are especially popular in developing areas like India, where Open, a different neobank also based in Bangalore, has a service that helps businesses automate financial operations. That startup raised $30 million just last month.