Zeta was the newest entrant to the coveted unicorn club after closing its latest financial round. The startup that helps banks and fintech to launch products, has raised $250 million in its Series D round led by SoftBank Vision Fund 2, one of the largest single investments in a banking tech startup globally. Its existing investor Sodexo also participated in the funding round.
Founded by entrepreneurs Bhavin Turakhia and Ramki Gaddipati in 2015, Zeta provides backbone technology for credit and credit-card processing, core banking, loans, mobile banking and personal finance management. “The proceeds of this funding round will be used to accelerate Zeta’s growth in the United States, Europe and India including scaling its operations, team, and platform to meet the demands of its expanding customer base,” the company said in a statement.
“Banks work with dozens of tech vendors — most offering discrete pieces of functionality and archaic stacks that are older than the internet. Zeta’s omni stack provides all the functionality that banks need to launch new products relevant to consumers today,” the startup said.
The startup serves 10 banks and 25 fintech companies in eight countries , including Sodexo, HDFC Bank, Kotak Mahindra Bank, Axis Bank, IndusInd Bank, Yes Bank, RBL Bank, SBM Bank India and others.
Zeta targets the world’s top 300 banks as potential clients, and wants the US to account for 60% of its revenue in five years. The company plans to double its headcount in the next 12 months from about 800 currently.
“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 can leverage a modern, cloud native platform and improve speed to market, agility, cost to income ratio and user experience,” said Bhavin Turakhia, CEO, Zeta. “We are privileged to have SoftBank join us in this exciting journey as we together disrupt the stagnant landscape of banking tech,” Turakhia added.
“Banking software is a $300 billion industry globally. Most banks still employ technology which is significantly older than their customers, impacting user experience and engagement. Zeta’s modern Omni Stack will drive banking software upgrades catering to the digital consumer, and innovations in financial services globally,” Munish Varma, a managing partner at SoftBank Investment Advisers, said in the statement.
Ramki Gaddipati, CTO, Zeta, said, “As the world moves to real time payments and digital financial services, the number of transactions per day between banks and customers are expected to grow exponentially. The increasingly digital world represents evolving security, privacy and data protection challenges to banks. The industry needs systems reinvented with security, privacy, scalability and reliability as the core foundations. Zeta’s Omni Stack answers that need.”
Zeta was the 14th Indian startup to become a unicorn this year. Avendus Capital was the exclusive financial advisor to Zeta on the transaction.