NiYo Solutions, a Bangalore-based ‘neo-bank’ that helps salaried employees and blue-collar workers access company benefits and other financial services, has raised $35 million in a new funding round to expand its business in the nation and explore international markets for some of its products.
The four-year-old startup, which serves small and medium businesses and other salaried employees across India, raised its Series B from Horizons Ventures, Tencent, and existing investor JS Capital. It has raised $49.2 million to date, with its $13.2 million Series A closing in January last year.
NiYO Solutions serves as a ‘neo-bank’ that relies on traditional financial institutions (Yes Bank and DCB banks, in its case) and offers additional features such as lending and insurance to customers. Blue-collared employees in India (and many other markets) continue to struggle in availing crucial financial services from banks that typically reserve them for privileged segment. With its payroll solution and other products, NiYO is trying to drive financial inclusion in the country, it said.
The startup also offers a global travel card with no mark up fee. Over 50,000 users have already signed up for the travel card — and NiYO intends to scale that figure to 500,000 by April next year. In an interview with TechCrunch, Vinay Bagri, co-founder and CEO of NiYO, said the startup is exploring bringing the travel card to other markets — though he did not share any names.
He said the startup will also use the fresh capital to build new product offerings and in expansion of its distribution and marketing efforts. It also wants to its customer base from about 1 million currently to grow to 5 million in the next three years. Bagri said NiYO is looking to acquire other startups that are a good fit for its vision.
Neo banks are increasingly becoming popular across the globe as traditional banks show little interest in addressing the needs of niche customer bases. Tide and N26 are showing remarkable growth in European markets, while Azlo, in the U.S., Tyro Payments and Volt Bank in Australia, are also among the top players.
In developing regions such as India, too, this tried and tested idea is increasingly being replicated. Open, another Bangalore-based neo-bank, helps businesses automate their finances. It raised $30 million last month.