Bengaluru-based banking tech start-up Zeta, a company co-founded by billionaire and serial entrepreneur Bhavin Turakhia, has raised $250 million from SoftBank Vision Fund 2 and existing investor Sodexo.
The Series C fund-raise values Zeta at $1.45 billion, making it the latest to join the coveted unicorn club.
“This is one of the largest single investments in a banking-tech start-up globally. We will be using the proceeds to accelerate Zeta’s growth in the US, Europe and India, which includes scaling its operations, team and platform to meet the demands of its expanding customer base,” Zeta Co-founder and CEO Turakhia said.
“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, financial institutions can leverage a modern, cloud native platform and improve speed to market, agility, cost to income ratio and user experience,” he added.
Sodexo, which had earlier invested under $60 million in 2019, participated in the round with a $10 million funding.
Avendus Capital was the exclusive financial advisor to Zeta on this deal.
Founded by Turakhia and Ramki Gaddipati, Zeta — who has customers including banks and fintechs — has a presence in North America, LATAM, UK, Europe and Asia.
Digital financial services
“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 Chief Technology Officer and Co-Founder Gaddipati said.
Including Zeta, 14 startups — including Moglix, Urban Company, ChargeBee and Gupshup among others — have attained the unicorn status in India this year. The country now has 51 unicorns, with the list including Groww, Pharmeasy, Cred and Meesho among others.
Munish Varma, Managing Partner, SoftBank Investment Advisers 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”.