EpiFi has raised $13.2 million (about Rs 94 crore) in a seed financing round led by a clutch of marquee investment firms, including Sequoia Capital, Ribbit Capital and Hillhouse Capital, a transaction that showcases investors’ continuing interest in backing neo-banking startups.
The eight-month-old Bengaluru-headquartered startup, which was founded by former Google Pay executives Sujith Narayanan and Sumit Gwalani, both of whom played a critical role in building and then launching the technology giant’s payment business in India, has also brought on board Cred founder Kunal Shah and David Velez, founder of Brazil’s Nubank, as early backers.
“Fundamentally, we will be using the capital to further build out our technology stack, bring on board a crack team of people, as well as towards early marketing and consumer adoption. The product will be out in a few months from now. We are currently in a pre-launch stage right now,” Narayanan told ET.
EpiFi, which currently has an employee strength of about 20, largely poached from global tech giants, such as Google, PayPal and Netflix, plans to start off by offering a digital banking solution, targeted at millennials, and which will include savings account and debit card facilities. The founders, however, declined to share more details, given that the company is still in stealth mode.
“The intent is to deliver a product that touches consumers across streams, which is intuitive and simple, demystifies their finances, and helps them spend intelligently. From a consumer finance perspective, they are looking for a unified experience,” Gwalani said.
The seed funding round, which values EpiFi at about $50 million, is the latest instance of some of the biggest venture capital firms backing India’s burgeoning neobanks, which are described as digital banks that have no physical branches, but provide a wide variety of online and mobile-first financial services, payment solutions, money transfer and lending services, among others, while partnering with licensed banks.
“Consumer banking, especially key products like savings accounts, haven’t seen true innovation in many years. Sujith and Sumit have demonstrated the ability to change the trajectory of financial services in India with their work on Google Pay in the digital payments space,” Shailesh Lakhani, managing director at Sequoia Capital India, said.
In November, Mumbai and Bengaluru-based Amica Financial Technologies, founded by former PayU India managing director Jitendra Gupta, raised $24 million in its maiden round of funding. Prior to that, in June, Open, which is also headquartered in Bengaluru, raised $30 million in a round led by Tiger Global Management.
In July, NiYO Solutions raised $35 million in which Chinese internet behemoth Tencent Holdings participated.
Separately, the investment in EpiFi is also likely to be the first seed-stage deal undertaken by Ribbit Capital, the Palo Alto-based, financial technology-focused investment firm, and which has emerged as one of the most active backers of startups in 2019, in Asia’s third-largest economy.
Thus far, the Meyer Malka-founded VC firm has backed digital payments aggregator BharatPe, B2B payments company Razorpay, online investment startup Groww and credit card payments and rewards venture Cred, among others.