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Neobank Fi launches P2P lending, diversifies by entering mutual funds space

Fi Money, a neobank, diversified its offering by rolling out an investment platform in a bid to attract more retail investors. The firm’s savings arm plans to offer mutual fund investments and will soon launch peer-to-peer (P2P) lending.

Users can start investing on the platform with as low as Rs 100 each time they order food or pay for other services. They can also invest weekly, monthly and daily in their mutual funds based on their financial goals and risk appetite. Money saved in Fi’s savings account will be moved to the mutual fund account based on user discretion.

Fi Money will also provide information, including net asset value (NAV) and past performances of a fund, which would be jargon free and easy to understand.

“Millennials usually have a bit of an inertia when it comes to investing. They think we would start next month or when there is a certain amount of money. With these functions, people can get over this resistance to investing,” Sumit Gwalani, Co-founder, Fi Money (Epify Technologies) said in a video interaction.

Fi Money was founded in 2019 by Sumit and Sujith Narayanan, who earlier co-founded and led product, respectively, for Google Pay. The neobanking platform, which has tied up with Federal Bank, lets users open a bank account using the app.

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A neobank firm usually ties up with a bank and provides a technology-forward platform. This platform offers digital services including quick account opening, online KYC (know your customer), and offers and discounts on shopping. These platforms also create personalised experiences by tracking spending patterns, and providing financial insight, among other things.

In the last two years, neobanks have found an exciting market among GenZ and millennials. Players including Jitendra Gupta-led Jupiter, which has also tied up with Federal Bank, Accel-backed Niyo Solutions, and Open, which is backed by Google, found a tech-savvy userbase using their products. But the fintech market soon got a bit cluttered with many credit card challengers including Slice, Uni and One Card, which started offering credit and discounts on multiple brands, a feature similar to a few neobanks.

Now, Fi Money is diversifying into mutual fund investment as many millennials were introduced to investing in the equities market. Currently, the firm claims to have 25 transactions, on an average, per month.

Fi Money, which is backed by Ribbit Capital, B Capital and Sequoia Capital, will now compete with broking platforms including Zerodha and Groww, and LenDen Club and Faircent, whcih offer P2P lending.

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