Open, operates an SME banking platform and also provides banks with infrastructure to launch their own digital banks. More than a dozen banks today use Open’s infrastructure to offer their banking services. Open currently has partnerships with 14 banks in India and a few more in Southeast Asia.
If the deal is a done deal, Open’s valuation is expected to more than double in two months since it closed its earlier USD 100 million fundraise from Temasek Holdings, Google, Visa and others in October. The Bengaluru-based company was estimated to be worth $500 million at the time.
Qatar’s sovereign wealth fund, Qatar Investment Authority, is among the investors which has held talks with Open, sources said. The firm has also received a term sheet from existing backers like Tiger Global and Temasek to co-lead the new round, they said. A term sheet is a non-binding agreement detailing the terms and conditions of a potential deal.
Neobank Open set to join the New Age Unicorn Club
“QIA has put in a term sheet but they typically write bigger cheques while leading a round. So, Open may also conduct a secondary share sale in this round, and in that case, the financing size may get stretched to $150 million,” one of the persons cited above mentiones.
An Indian private equity firm was also in talks with Open to participate in the round but is unlikely to proceed, sources said. “Tiger, being an existing investor and known for its aggressive nature to back fast growing companies, has also held talks to co-lead the new round. The final construct of the round will be decided in the next one week or so.”
Nothing is official right now, earlier in December, Open acquired consumer neobanking platform Finin in a $10 million cash-and-stock deal. Open will use Finin to strengthen its enterprise business and take it overseas in a significant way after the deal, Achuthan had told a leading financial daily.
Founded in May 2017 by Mabel Chacko, Anish Achuthan and Ajeesh Achuthan, Open offers a neobanking platform that integrates all the tools used by small businesses with a business current account. It has around 2 million small and medium-sized enterprises (SMEs) on its platform and processes over $24 billion in gross transaction volume annually. Open said earlier this month that it is adding 90,000 SMEs to its platform each month.
