Banking technology platform Zeta joins unicorn club with a $250 Mn fundraise

Banking technology platform Zeta joins unicorn club with a $250 Mn fundraise

With cash from investors flowing in like never before, Indian start-ups are having perhaps their greatest year ever. On Monday, six-year-old banking technology platform Zeta recorded another triumph for the start-up ecosystem as it became the 14th firm to evolve into a unicorn this year after gobbling $250 million in a Series D funding round led by SoftBank Vision Fund II, raising its valuation to $1.45 billion, more than 4 times than its valuation in 2019 ($300 million).

The funding round included existing investor Sodexo as well.

Zeta provides modern processing and embeddable banking solutions, and markets itself as the “next gen platforms for banks, fintechs and distributors.” Banks “innovate at snail’s pace,” Bhavin Turakhia, co-founder and chief executive officer, said from Zeta’s office in Dubai. “Even space travel got disrupted before the banking industry.”

“Banking software is a $300 billion industry globally. Most banks still employ technology that is significantly older than their customers, impacting user experience and engagement,” Munish Varma, a managing partner at SoftBank Investment Advisers, said in a statement.

As banks have started to move online (a move that has been accelerated by the current pandemic), it has worked in Zeta’s favor, which plans to extend to Europe and the US, offering technology for credit and credit-card processing, core banking, loans, mobile banking, and personal finance management. Its technology helps engage with not only banks but other fintech start-ups and digital consumer platforms as well.

Zeta’s current targets are the top 300 banks in the world as potential clients in the future, as well as aiming to achieve 60% of its revenue to come from the US alone in five years. These are ambitious goals, no doubt, but for a platform that already has 10 banks and 25 fintech companies in eight countries among its customers, including India’s HDFC Bank Ltd. and Sodexo, it might not be impossible. After all, Zeta’s product can combine the various elements needed for the banks’ backbone systems into one cloud-based offering.

The third start-up founded by serially successful billionaire entrepreneur (if that is a term you can use) Bhavin Turakhia, Zeta is the latest investment by SoftBank in India, after social commerce Meesho. Zeta joins Meesho in the list of start-ups to have achieved the coveted unicorn status last month. Others include Pharmeasy, Groww, CRED, ShareChat, Gupshup among others.

Japanese technology conglomerate Softbank, appears to have sprung back into action after nearly 2 years of lull. Softbank’s own financials, which were dreary to say the least for couple of years, recorded massive positive jumps in the latest quarter. All of that resulted in investors forgetting WeWork and other Vision Fund 1 bets, resulting in increased confidence in the way Softbank deploys Vision Fund 2. It is back at writing big cheques and springing startups past the $1Bn valuation mark. SoftBank is reported to be in talks to invest up to $500 million in food delivery powerhouse Swiggy, while also engaging with SaaS start-up WhatFix.

Source: https://thetechportal.com/2021/05/24/banking-technology-platform-zeta-joins-unicorn-club-with-a-250-mn-fundraise/

Department of Information Technologies: https://www.ibu.edu.ba/department-of-information-technologies/