Fintech software-as-a-services firm Zeta raised $250 million from SoftBanks’ Vision Fund at a valuation of $1.45 billion. Zeta targets the massive opportunity of Open Banking or neo-banking that many traditional banks in India are undertaking. The company operates in North America, Latin America, United Kingdom, Europe and Asia.
Zeta has been founded in 2015 by serial entrepreneur Bhavin Turakhia, who had previously set up several startups like LogicBoxes, Ringo and Flock. For the majority of its history, Zeta was bootstrapped and it was only in July 2019 that Turakhia and his co-founders looked to raised external funding. At the time, Zeta raised $300 million from investors like Sodexo SA.
With this round of funding Zeta has become the 14th Indian startup to become a unicorn since the start of the year, following the likes of Meesho, CRED, Groww and Urban Company to name a few.
What Zeta Does
Zeta works with banks and fintechs to provide them with software tools and platforms that they can use to improve the customer experience. Essentially, banks and fintechs go to Zeta to provide them a ready-to-use or easily implementable software platform for their various services. These platforms can be deployed in parallel to a banks’ existing apps or software, the company said. For instance, if a bank or fintech wants to create a new channel and platform for its credit card, Buy-now-pay-later, personal loan or deposit business, they approach Zeta which has basic software frameworks that can be easily customised, integrated and scaled with the bank/fintechs’ IT system. This reduces costs for a bank as they can use Zeta’s software tools and pay them a fee, instead of building the entire platform in-house.
In a statement, Turakhia said that most banks are using decades old software built on legacy infrastructure. “They have been slow to innovate and provide poor user experiences. With Zeta, financial institutions can leverage a modern, cloud native platform and improve speed to market, agility, cost to income ratio and user experience,” he said. The company will use the fresh capital to accelerate its expansion plans in United States, Europe and India, it said.
At present Zeta works with 10 banks and 25 startups including HDFC Bank, Axis Bank, Yes Bank, Sodexo RBL Bank, Kotak Mahindra Bank, IndusInd Bank, and SBM Bank India, across eight countries. “Banks work with dozens of tech vendors – most offering discrete pieces of functionality and archaic stacks that are older than the internet. Zeta’s Omni Stack provides all the functionality that banks need to launch new products relevant to consumers today,” the company said in a statement.
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