Exclusive | Neobank Open expected to enter unicorn club with new funding of $100-150 million

Bengaluru: The stampede of unicorns continues even in the last few days of the year, with one more startup on its way to join the not-so-rarified club of companies valued at $1 billion and more. Sources told us that the Google-backed neobank Open is in advanced stages of talks to close a fresh funding round of $100-150 million after which it will be valued at $1.1-1.3 billion.

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

“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 said.

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.”

When contacted, Open’s cofounder and Chief Executive Officer Anish Achuthan declined to comment on the matter. An email sent to QIA did not elicit an immediate response.

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 ET.

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.

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