The fast-spreading coronavirus has emerged as one of the biggest threats to the global economy. And, the impact can significantly be seen in the startup ecosystem.

A month-long e-survey conducted by NASSCOM in May to study the impact of the COVID-19 pandemic on Indian startups showed that 70 percent of startups have less than three months of cash runway.

Among sectors, agritech and fintech startups are the worst hit when it comes to funding, the survey found.

fintech startupAlso Read[Funding alert] Suniel Shetty invests in SAI-branded edtech venture SEMSI

However, amid the pandemic, with the practice of social distancing and zero-touch policy, digital payments and transactions recorded remarkable growth and lured investors.

Moreover, the Reserve Bank of India (RBI) also emphasised on transacting digitally and urged customers to use online banking facilities, ensuring contactless transactions.  Further, kiranas, OTTs, online gaming, e-learning, ATM withdrawals, and broadband usage are also giving a boost to the use of digital payments. 

Here are 11 fintech startups that managed to raise funds during the pandemic.

Jai Kisan

Mumbai-based rural fintech startup Jai Kisan on June 16, 2020, raised Rs 30 crore in a Pre-Series A round led by Arkam Ventures (previously known as Unitary Helion), with participation from NABVENTURES Fund I (backed by NABARD). 

Founded in 2017 by Texas A&M University graduates Arjun Ahluwalia and Adriel Maniego, Jai Kisan is building a rural fintech full-stack platform to cater to the financial needs of customers in rural emerging markets.

Jai Kisan

Jai Kisan Co-founders (L:R) – Arjun Ahluwalia , Adriel Maniego

Also Read[Funding alert] Rural fintech startup Jai Kisan raises Rs 30 Cr in Pre-Series A from Arkam Ventures, NABVENTURES, and others

Over the past six months, it has disbursed over Rs 50 crore in loans of top-tier credit quality to a diverse set of 5,500+ borrowers from various income groups across 10 states. 

Setu

In April this year, Bengaluru-based fintech startup Setu raised $15 million in a Series A financing round led by Falcon Edge and Lightspeed Venture Partners US, along with existing investors Lightspeed India Partners and Bharat Inclusion Seed Fund.

Co-founded by Sahil Kini, former Principal at Aspada Investments, and Nikhil Kumar, a former fellow at iSPIRT Foundation, Setu is a fintech API infrastructure provider that connects regulated financial institutions to other companies that wish to offer financial services to their customers.

Nikhil Kumar

Setu Co-founder Nikhil Kumar

According to the startup, it will be using these funds to continue strengthening its team, roll out a suite of new products, and improve its technology infrastructure.

NIRA

NIRA, a fintech startup offering small-ticket loans to blue and grey-collared workers via its mobile app and website, in April closed $2.1 million in Pre-Series A round from existing and new angel investors in the UK, Europe, and India. 

The funding will be used to add high-quality talent to its team, further develop its product and technology, and scale up its lending volumes.

nira nupur rohit

NIRA Co-founders Nupur Gupta and Rohit Sen

Also Read[Funding alert] Fintech startup NIRA raises $2.1M in Pre-Series A

Co-founded by ex-Goldman Sachs colleagues Rohit Sen and Nupur Gupta, NIRA offers access and credit to working Indians at their time of need. The startup offers loans of up to Rs 1 lakh for up to one year, via its app-based credit line.

Launched exclusively in Bengaluru in mid-2018, NIRA now operates pan-India with many thousands of customers from more than 100 cities across the country.

YAP

API fintech platform YAP in April raised $4.5 million in its Series A round led by Singapore-based venture capital firm BEENEXT.  

The Chennai-based startup said the funds will be used to strengthen the team, build technology, and offer enhanced API products to fintech with a specific focus on enabling access to credit, corporate banking solutions, cross border payments, and the freshly minted Neobanking stack. 

YAP currently provides API-based financial services access to over 200+ fintechs, and the startup has raised over $1 million in angel financing earlier this year.  

Khatabook

Khatabook, a Bengaluru-based utility solutions provider that helps micro, small, and medium-sized businesses track business transactions, in May closed a $60 million Series B round of funding led by B Capital Group. 

More than one million merchants are uploading data and engaging with the Khatabook app daily while adding $200 million worth of transactions every day. 

Khatabook

Khatabook Team

The startup also said that using a digital-first user acquisition approach has helped Khatabook reach over eight million active merchants across 11 languages in less than a year. 

The Bengaluru startup will use the funds to ramp up its product offering for its core merchant base, with a view on building solutions around financial services and a merchant-focussed distribution platform.

Lendingkart

Ahmedabad-based fintech startup Lendingkart Technologies Pvt, Ltd., in May raised an equity round of little over Rs 319 crore in its Series D funding (comprising Rs 233 crore as part of D1, and Rs 86.24 crore as part of D2).

To date, it has raised more than Rs 1,050 crore of equity capital from investors. The current funding will be deployed to expand the startup’s lending base, and further, reach out to small and underserved micro and small enterprises. It also wants to strengthen the startup’s technological and analytics capabilities.

Founded in 2014 by Harshvardhan Lunia and Mukul Sachan the startup claims to have evaluated nearly half a million applications, disbursing 1,00,000+ loans to more than 89,000 MSMEs in 1300+ cities across 29 states and union territories of the nation since its inception.

Harshvardhan Lunia, CEO and Co-founder of Lendingkart Technologies

Harshvardhan Lunia, CEO and Co-founder of Lendingkart Technologies.

The startup is currently based in Ahmedabad, with offices in Bengaluru, Mumbai, Delhi-NCR, and Kolkata, but has a service reach across India.

Nium

Global fintech startup Nium (earlier InstaReM) in May raised a new round of equity funding joined by new investors Visa and BRI Ventures (the corporate venture arm of Bank BRI of Indonesia).

Nium said it will be using the funds to further build its diversified payment infrastructure offering that includes outreach to consumers, SMEs, large enterprises, as well as banks and financial institutions.

Prajit Nanu, Co-founder of Nium(InstaReM)

Prajit Nanu, CEO and Co-founder of Nium

It is currently licensed in Japan, Indonesia, EU, Australia, Canada, Hong Kong, Malaysia, India, and Singapore, and claims to operate in over 90 countries, 65 in real-time, and in 63 currencies.

HomeCapital

HomeCapital, a Mumbai-based fintech startup focussed on accelerating housing among millennials in India, raised a funding round in April led by Varanium NexGen Fund. 

 

The round also saw participation from Venture Catalysts, JITO Incubation and Innovation Foundation, Singapore Angel Network, Venture Gurukool, and Shalin Shah, among other investors.

HomeCapital

Also Read[Funding alert] Varanium NexGen Fund leads investment in fintech startup HomeCapital

The startup claims that it supports home buyers in eight cities, including Mumbai, Bengaluru, Chennai, Pune, and Kolkata, among others. It will use the proceeds of this round to expand operations and scale technology infrastructure. 

Aye Finance

Gurugram-based fintech startup Aye Finance, backed by Capital G, raised Rs 180 crore in debt funding from leading lenders from India and abroad in April.

Aye FinanceAlso Read[Funding alert] Despite coronavirus lockdown, fintech lender Aye Finance raises Rs 180 Cr in debt funding

Since its inception in 2014, Aye Finance claims to have provided $410 million worth of credit loans to over 1,96,000 grassroots businesses that would otherwise be left out of the formal financial system. 

The startup says it has an active customer base of over 1,30,000, and assets under management of Rs 1,500 crore.

Mera Cashier

Noida-based fintech startup Mera Cashier in April raised $150,000 in a bridge round of funding from Bollywood singer Sukhbir Singh, India Accelerator, Boudhik Ventures, Shankar Nath (ex-CMO, Paytm), and Shaurya Garg (Founder, Fundoo Works). 

Suneel Kumar, Co-founder, Mera Cashier

Suneel Kumar, Co-founder, Mera Cashier

Launched in July 2019 by Suneel Kumar, Gaurav Tomar, and Sucharita Reddy, Mera Cashier is an app for small and micro businessmen to record and manage credit transactions.

Recko

Enterprise fintech startup Recko in  April raised $6 million in Series A funding led by Vertex Ventures Southeast Asia and India. The funding will be used towards hiring, product development, and expanding its presence outside India.

Recko

Founders of Recko

Also Read[Funding alert]: Recko raises $6M in Series A round led by Vertex Ventures, with participation from Prime VP

Founded in 2017 by serial entrepreneurs Prashant Border and Saurya Prakash Sinha, the startup enables AI-powered reconciliation of digital transactions. It has recently started working with banks, NBFCs, and insurance companies, and is running pilots with them.

(Edited by Suman Singh)

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Original Source: yourstory.com

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Original Source: yourstory.com

Banking and finance plays an essential role in driving the growth of the Indian economy. In the past few years, we have seen the rise of fintechs and digital wallets, which has led to a massive increase in the financial inclusion of the Indian population, especially in rural areas.

To prevent fraud and money laundering, the BFSI sector needs to comply with KYC norms that were introduced by RBI and are based on the Government of India’s (GOI) PMLA Law of 2002.

Aadhaar-based KYC verification had simplified the process and reduced the time taken by the BFSI sector to on-board customers drastically. But, things changed with the Supreme Court order dated September 26, 2018, declaring the use of Aadhaar-based KYC by private players as unconstitutional.

To overcome this challenge, RBI has introduced Video KYC as an alternate tech-driven mode of KYC in its notification dated January 9, 2020. It is based on the Aadhaar and Other Laws (Amendment) Bill, 2019, which was introduced by the government on June 24, 2019.

video kyc

The RBI amendments state that “with a view to leveraging the digital channels for Customer Identification Process (CIP) by Regulated Entities (REs), the Reserve Bank has decided to permit Video-based Customer Identification Process (V-CIP) as a consent-based alternate method of establishing the customer’s identity, for customer on-boarding”.

Also ReadBanks can use Aadhaar for KYC with customer's consent: RBI

Contactless on-boarding during COVID-19

Video KYC could prove to be a tremendous boost for private and public banks, lending companies, prepaid wallet players, insurance, financial securities, and non-banking financial institutions. They are now looking for a contactless and paperless customer on-boarding process while still being 100 percent compliant with RBI guidelines.

The Video KYC provision allows bank officials or regulated entities (RE) to remotely verify the customer’s identity using Aadhaar or PAN card. To ensure the integrity of the Video KYC process, RBI encourages REs to adopt AI-driven and face-matching technologies.

However, there are certain guidelines laid by RBI to comply with before initiating this process. The audio-visual interaction is triggered by RE’s domain, and the Video-Based Customer Identification Process (V-CIP) shall then be operated by the officials that are specifically trained for it.

This could significantly reduce the time from a five to seven-day process to three minutes to on-board a customer remotely. It will allow BFSIs, NBFCs, and e-wallets to provide superior customer experience and will reduce on-boarding costs by 90 percent.

Beyond compliance: a competitive differentiator

While Video KYC has enabled banks to ensure compliance with remote on-boarding, customer drop-offs remain the biggest challenge.

To complete the Video KYC process successfully, customers need to have their Aadhaar, PAN card, and other documents to verify the signature handy. It needs a pre-scheduled time and many times banks would need to chase customers to get this KYC interview to happen.

This then becomes an important step in the on-boarding journey and needs to be looked like a sales funnel.

To ensure higher video KYC completion rates, BFSI companies need to put the effort into reminding and scheduling the video KYC recording at the customer’s convenience. Experience would be key here.

Banking and finance companies that can make this process hassle-free for users have the highest chance to reduce drop-offs and on-board more customers.

Let’s say, for example, a bank ABC uses only outbound calls to remind customers to complete their KYC. Another bank DEF uses other non-intrusive channels, like SMS or WhatsApp, to remind customers and even allows them to reschedule KYC recording on the go.

DEF bank gives the control of KYC completion to the customer who can complete the process at his convenience rather than just getting interrupted by a voice reminder of bank ABC.

This superior customer experience can become a competitive advantage for banking and finance companies to acquire more customers and gain a higher market share.

Future of video KYC

Video KYC is here to stay and will become the de facto choice of customer identification.

We see many tech investments happening in this space to make the system more robust and ensure the integrity of the video KYC process.

Some of these are

AI-based face recognitionEnsuring good video quality for low networksVideo compression to reduce storage space requirement while ensuring integrityFraud and spoofing attack preventionScreen sharing for Aadhaar offline KYCConcurrent audits to fast-track the processAutomated omnichannel reminders and schedulers

The acceleration towards digital adoption in the banking and finance sector is expected to rise with the introduction of video-based digital KYC.

While the banking and finance sector has been discussing digital transformation for long, COVID-19 has left them with no option but to implement it. Many of them have started using alternate modes of engagement like WhatsApp and IVR. Video KYC is also enabling them to manage compliance requirements.

The BFSI sector can integrate video KYC as part of the customer journey workflow to on-board customers digitally while still ensuring compliance with RBI guidelines.

(Edited by Teja Lele Desai)

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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Original Source: yourstory.com

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