As a part of its ongoing Series C round, Bengaluru-based neobanking platform Fi (whose parent company is epiFi Technologies) has raised $15 million from Singapore’s state-owned investment firm Temasek Holdings (via V-Sciences Investments Pte Ltd), and $2 million from existing investor QCM Holdings, as per two separate regulatory filings.
The fundraise is a part of the larger Series C round under which the startup had raised $45 million from existing investor Alpha Wave Global (formerly Falcon Edge Capital) in June.
This takes Fi’s total fundraise to $137.2 million, with investors including Ribbit Capital, Sequoia Capital, and Facebook co-founder Eduardo Saverin’s B Capital among others on its cap table.
Temasek’s fintech bet
Temasek counts startups like PharmEasy, Licious, UpGrad, Unacademy, Shiprocket, ShareChat, Lenskart, Ola, and PharmEasy in its portfolio. Last year, four of its portfolio companies—Zomato, PolicyBazaar, Devyani International, and Cartrade—got listed on the Indian stock exchanges.
Interestingly, Temasek has invested in another neobanking platform Open, which turned unicorn last year following a $100 million Series C round led by the Singapore firm.
It is also a backer of unicorn fintech FPL Technologies, the parent company of credit card platform OneCard.
Corpus for new products
Founded in 2019 by former Google Pay executives Sujith Narayanan and Sumit Gwalani, Fi is a financial app that offers digital bank accounts and financial guidance to working professionals. It offers products such as a zero-balance savings account and helps its users track spending and organise their funds.
It competes with startups like Jupiter, Niyo, P10, and InstantPay in the consumer-focused neobanking space.
In May 2022, Fi announced its foray into new financial services, including mutual fund investments, peer-to-peer (P2P) investments (Fi Jump), and digital lending on its platform, along with other savings products. This would put it in direct competition with various other fintechs in the space.
For P2P lending, it has partnered with P2P non-bank Liquiloans.
Further, it plans to add new credit products like personal loans, credit cards, and a credit line over the next 12 months, and onboard more banks. At present, Fi provides banking services through a partnership with Federal Bank.
The fundraise comes at a time when digital lending apps and third-party tech providers are grappling with new digital lending rules released by the Reserve Bank of India (RBI).
The mandatory guidelines intend to push for greater transparency and disclosure to borrowers. They direct lending apps, third-party fintechs, and regulated entities to adhere to a host of rules, including disclosures of key fact statements, data consent from borrowers, and disclosing the all-inclusive cost of digital loans to borrowers, as well as don’t allow for an increase in credit limits without the borrower’s consent.
While some recommendations of the panel have been accepted for immediate implementation, some have been accepted in principle and will require further deliberations.