The deal will help Open add over 800K MSMEs to its potential customer base
Open will soon launch a neobanking platform for tax practitioners and accountants in India
The neobank also claimed to be onboarding 50,000 businesses every month
Mengaluru-based neobanking platform Open has acquired goods and services tax (GST) and financial automation startup Optobizz for $5 Mn in a stock-plus-cash deal, that will see all 35 Optobizz employees joining the neobanking startup.
Open claimed the deal would expand its MSME target customer base by over 800K from the current 1 Mn customers. The startup said it processes transactions worth $24 Bn annually. As of December 2020, Open had said it had more than 500K SME customers across 15 partner banks. Further, the company will be setting up a development centre in Hyderabad, where Optobizz is headquartered.
Optobizz was founded by Kalyan Chakravarthy Reddy Alla, Satya Prakash Venkata Sai Buddhavarapu, Adisesha Reddy Gaddam, Ravikanth Somayaji and Sachin Tyagi in 2017. The company develops and offers an accounting and tax management software called OptoTax.
“Addition of tax filing to our platform will enable our merchants to not just manage banking, payments, and automated accounting seamlessly but will also solve the major hassle of tax filing,” said Open cofounder and CEO Anish Achuthan. He added that acquisition would help Open strengthen its product capabilities and offer innovative solutions for small businesses.
Open was founded in May 2017 by serial entrepreneurs Anish Achuthan, Mabel Chacko and Ajeesh Achuthan along with ex-TaxiforSure CFO Deena Jacob. The startup offers a modern digital banking services specifically for small businesses. Besides the acquisition, Open has announced plans to launch a neobanking platform targeted towards tax practitioners and accountants in India, with co-branded business banking services, integrated tax and accounting services and more.
Open’s MSME Neobanking Platform
With more than six crore MSMEs operating in the country, as per official records, Open’s focus area has enormous potential compared to legacy banks. The company claims it only started monetising late last year and has already reached an annual revenue rate of $3 Mn, according to cofounder Achuthan. The bank also claimed to be onboarding 50,000 businesses every month and is targeting 5 Mn paid subscribers by the end of the year.
In its previous round, Open had raised over $37 Mn from Tiger Global Management, 3one4 Capital and Beenext. The neobanking startup competes with a slew of players including the likes of Namaste Credit, NiYO, Hylo, PayZello, YeLo, Finin and RazorPay X, while new ones are being launched every few weeks.
Earlier this week, TaxiForSure cofounder Raghunandan G’s second venture, neobanking startup Zolve raised $15 Mn in seed funding from Accel and Lightspeed. Founded in December 2020, Zolve claims to solve the credit hassles for students who go to the US for studies, where it partners with banks to provide financial products seamlessly.
Besides this, Bengaluru-based neobanking startup Finin also raised funding from Unicorn India to ramp up its marketing, customer acquisitions and hiring process. Founded in 2019 by Suman Gandham and Sudheer Maram, Finin is a consumer-focused AI-powered neobank which aims to make banking simpler for students, millennials, white-collar jobholders among others.
February 18, 2021 | 7:50 PM
An earlier version of this story had a typo in the headline about the acquisition amount, which has now been corrected. We regret the error.