FinTech: SoftBank Invests $250M In Zeta, A Banking Technology Startup
With a valuation of $1.25 billion, Zeta turns unicorn.
Dubai-headquartered, Indian fintech startup Zeta has raised $250 million from SoftBank’s Vision Fund 2 at a valuation of $1.25 billion. The startup, founded by Bhavin Turakhia and Ramki Gaddipati, creates technology for banks to quickly launch user-friendly digital offerings. (Mint)
Legacy banking is clunky
“Most banks are using decades-old software, built when mainframes and Cobol were in vogue. They have been slow to innovate and provide poor user experiences. With Zeta, FIs (financial institutions) can leverage a modern, cloud-native platform and improve speed to market, agility, cost-to-income ratio, and user experience,” said Turakhia.
Currently, Zeta is working with HDFC Bank (NSE: HDFCBANK) on several products, slated to launch later this year. Other clients include Sodexo, Kotak Mahindra Bank, Axis Bank, IndusInd Bank, Yes Bank, RBL Bank, and SBM Bank India.
However, the tie-up with HDFC Bank is the largest in scale in India, says Turakhia.
Zeta’s Tachyon is a product for credit, debit, and prepaid processing with card controls and personal finance management. Its Tachyon Loans product is a buy-now-pay-later and personal loan management platform. The Zeta Tachyon Mobile is a ready-made, white-labeled, customizable mobile app for credit cards, checking accounts, prepaid, loans, buy-now-pay-later, personal finance management, and more.
“We decided to bring in a partner because the scale that we are trying to achieve is massive,” clarifies Turakhia. “Banking has not been disrupted the way other industries have been. The idea is not to build to sell but to build a $100 billion enterprise. We want to make a significant dent into the $200-300 billion global banking technology market.”
Use of funds
Approximately 70% of the funds raised from SoftBank will go towards business development.
Zeta will spend the rest on building its client base and developing its technology, particularly its credit card processing stack.
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