B Capital, Falcon Edge join $50m round for India digital bank
B Capital Group and Falcon Edge Capital have joined a $50 million Series B round for Indian digital banking services provider Fi at a valuation of $315 million.
The investment marks a sevenfold increase in the company’s valuation since the $12. 1 million Series A provided by Sequoia Capital India and Ribbit Capital last year. Sequoia India and Ribbit, also investors in the $13.2 million seed round in 2020 re-upped in the Series B.
Fi describes its app as a savings-friendly product that simplifies finances for working professionals. More than one million people have registered to open an instant, zero-balance savings account on the platform, which offers a debit card service and leverages a partnership with Federal Bank. Access to Fi was restricted to Android users until last month when an iOS app was launched.
“Fi is focused on serving the pressing financial needs of 60 million digitally savvy millennials in India. This is a large, attractive, and growing market especially in the backdrop of $180 ARPU [average revenue per user] for top retail banks in the country,” Kabir Narang, a founding general partner at B Capital, said in a statement.
“Fi is building a modern banking product, that is receiving rave reviews from users of the Fi app and debit card.”
Early adopters were quick to take up Fi’s various saving features, with about 20% of users opening “smart deposit” accounts that combine aspects of fixed deposit and recurring deposit products to maximize user flexibility.
Another well-received feature is “FIT Rules,” which facilitates automatic saving based on conditions defined by the user. With titles such as “healthy, wealthy, and wise” and “don’t shop till you drop,” they help users set aside money each time they order food or shop online.
In September, Fi was one of the first financial technology companies to adopt the Reserve Bank of India’s account aggregator (AA) framework. The company expects to launch a feature built on AA soon that allows users to view their financial data from across various bank accounts. It also plans to roll out an investment services feature in the coming months.
“We have observed that there is inertia towards saving amongst digital natives. They want to save but never actually get to taking proactive steps towards saving. While designing the features for Fi, we have tried to keep the user at the center and build tools that help them overcome this inertia,” Sumit Gwalani, a co-founder of Fi, added. “The uptake of some of these features validates our efforts.”
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