Neo-banking firm NiYO raises $35 mn from Horizons Ventures, Tencent, others

Existing investor JS Capital among participants in Series B round; NiYO mulls expanding into international markets, particularly EMs

Digital banking start-up NiYO Solutions has raised $35 million in Series B funding round from Horizons Ventures, Tencent and existing investor, JS Capital. The Bengaluru-based company would use the funding to accelerate the development and rollout of new product offerings and expand distribution and marketing. The firm said it would also explore expanding into international markets, particularly in emerging economies which offer similar opportunities for digital disruption through the “neo-bank” concept.

NiYO was founded by banking veteran Vinay Bagri and Virender Bisht, a former top executive at MakeMyTrip and MobiKwik. It had previously raised $14 million in funding rounds led by Prime Venture Partners. With the current round, the total fund raised by NiYO is $49 million.

“Our core focus on customer value and customer service is paying rich dividends with strong growth across business metrics in the last 12 months,” said NiYO co-founder and chief executive Vinay Bagri. “With this fresh round of funding, we aim to fortify our service suite and further accelerate our growth,” said Bagri.

NiYO serves around 1 million users at present. With increasing demand and available funding for rapid expansion, it aims to service five million users in the next three years. NiYO is based on the concept of a neo-bank, a type of direct bank that is 100 per cent digital and reaches customers on mobile apps and personal computer platforms. Neo-banks do not operate traditional physical branch networks and may adopt technologies such as artificial intelligence and machine learning, giving them an edge over the legacy systems used by the traditional banking players.

Globally, the big names in neo-banking include UK-based Tide, Atom Bank, Monzo, Revolut and Starling Bank. Other players include US-based Azlo, Australia's Tyro Payments and Volt Bank, Germany's N26 and Netherlands-based bunq.

“From our first meeting with Vinay (Bagri) and Virender (Bisht) we were excited by the vision of bringing ‘neo-banking’ experience to the blue-collar segment - helping drive the benefits of digitization, financial inclusion and to the hard-working masses in India,” said Sanjay Swamy, managing partner, Prime Venture Partners.

NiYO aims to create a technology-enabled and value-added product and service offering layer over the existing banking infrastructure, to offer a comprehensive digital banking proposition to its retail and SME customer base. The firm said it has a large presence in the blue collared salaried segment through NiYO Bharat Payroll Solution, where it drives financial inclusion with tech innovations by providing banking services which were available only to the privileged segment. The company said its product is designed to digitally empower India’s massive blue-collar workforce, primarily in unorganized and semi-unorganized labour-intensive sectors. It provides them with a platform to manage their savings, payments, investments and financial protection (insurance). One example of such innovation is NiYO Bharat Mobile App which is available in 8 languages and can be enabled using speech.