Open’s hunt for revenues leads it to IIFL’s doorstep

Open’s hunt for revenues leads it to IIFL’s doorstep

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Pratik Bhakta

158 reads
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Pratik Bhakta

158 reads

Although it has achieved unicorn status, a strong topline has always proved elusive for Tiger Global-backed MSME neobank Open. Now, following a joint venture with IIFL, and with a definitive lending plan in place, will it finally be able to monetise its business banking platform?

September 05, 2022

12 MINS READ

Much before neobanking became a buzzword in banking and public policy circles, a clutch of ex-Citrus Payments folks sensed there was an opportunity in digitising business banking.

Having cut their teeth in consumer payments, Anish Achuthan, Mabel Chacko, Ajeesh Achuthan and Deena Jacob set up Bank Open, an MSME-focused digital banking platform, back in 2017. The idea was simple: to create a platform to help business owners collect payments, manage vendor dues, reconcile inbound transactions and organise payouts.

The headline numbers seem to indicate that they managed to strike gold. Within five years of inception, Open achieved unicorn status, with a $50 million round led by IIFL Finance, Tiger Global, Temasek and 3One4 Capital. Open has around 2.7 million businesses with annualised transactions worth over $30 billion. Its deposit value alone is worth more than $2 billion, spread across various partner bank accounts.

But behind these glamorous headlines, Open’s total revenue figures till last year continued to remain dismal. The last reported financials, accessed from Tracxn, show that Open Financial Technologies, the company that runs Openmoney.co, reported only Rs 15.7 crore of revenue in FY2021. Of this, around Rs 5 crore was operational revenue and the rest came from interest on bank deposits. The result: a massive loss of Rs 65 crore.

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