Updated: May 25, 2021 1:29:13 pm
Banking technology start-up firm Zeta on Monday announced a $250 million fundraising from Japanese investment behemoth Softbank. With its Series C round of investment from SoftBank Vision Fund 2, the start-up’s valuation stands at $1.45 billion, turning it into a unicorn.
This is one of the largest single investments in a banking tech startup globally, Zeta said in its statement. The proceeds of this funding will be used to accelerate the company’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 plans to boost its Omni Stack for banks. Zeta’s Omni Stack provides all the functionality that banks need to launch new products relevant to consumers today. “Banks work with dozens of tech vendors – most offering discrete pieces of functionality and archaic stacks that are older than the internet,” the start-up said.
Zeta serves over 10 banks and 25 fintech firms across eight countries, including Sodexo, HDFC Bank, Kotak Mahindra Bank, Axis Bank, IndusInd Bank, Yes Bank, RBL Bank, SBM Bank India and others.
“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 & Co-founder of Zeta.
He further said that with SoftBank’s investment, the company is looking to disrupt the “stagnant landscape of banking tech”.
Zeta’s Omni Stack comprises of Zeta Tachyon credit, debit and prepaid processing with card controls and personal finance management capabilities. It also has Zeta Tachyon Loans whis is a modern buy-now-pay-later and personal loan management platform. Zeta Tachyon Deposits, which is a modern core for DDA, checking accounts, savings accounts and deposits and Zeta Tachyon Mobile which 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.
The start-up claims that it provides only the fully modern platform for banks that can be deployed in parallel for new programs and new customers without uprooting legacy technology. “Banks across the globe have increased income, improved customer engagement and reduced fraud by leveraging Zeta’s Omni Stack,” it said.
Softbank Managing Partner Munish Varma said, “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.”
Ramki Gaddipati, CTO & Co-founder of Zeta said that the industry needs systems reinvented with security, privacy, scalability and reliability as the core foundations. “Zeta’s Omni Stack answers that need,” he said.
During the latest funding, Sodexo participated as an additional minority investor in the round. Zeta is founded by Bhavin Turakhia and Ramki Gaddipati. It has presence in North America, LATAM, UK, Europe and Asia.
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