Transbnk Raises $25M to Modernize Corporate Banking in India

The Lag in Corporate Banking Digitization in India

Despite the widespread digitization of banking services for individual consumers in India, corporate banking remains significantly behind, still reliant on outdated infrastructure, extensive paperwork, and complex spreadsheet-based processes. TransBnk is aiming to bridge this divide, and has secured $25 million in funding led by Bessemer Venture Partners to accelerate its development.

Growth of Consumer Fintech vs. Corporate Banking

India’s consumer fintech sector has seen substantial growth over the last decade, fueled by innovations like the government-supported Unified Payments Interface (UPI) and the increasing number of payment aggregators.

However, these advancements have had limited impact on the banking experiences of businesses, particularly in areas like transaction banking, where manual procedures still govern payments, collections, and statement delivery. Businesses frequently manage multiple online banking portals and depend on spreadsheets for reconciliation purposes.

A Significant Untapped Market

This disparity is notable considering India’s position as the world’s largest small and medium enterprise (SME) market, encompassing nearly 75 million SMEs. All of these businesses could benefit from a more contemporary financial infrastructure.

The potential within corporate banking represents a considerable commercial opportunity. A February 2024 report from Chiratae Ventures and The Digital Fifth projects the Indian B2B fintech industry to reach a $20 billion market size by 2030.

India's Fintech Landscape

Currently, India boasts 26 fintech unicorns with a collective market capitalization of $90 billion, as analyzed by JM Financial last year. However, the majority of these startups have concentrated on innovations in payments and lending, rather than foundational banking infrastructure.

TransBnk's Approach

Mumbai-based TransBnk, established by former bankers Vaibhav Tambe, Lavin Kotian, Pulak Jain, and Sachin Gupta, is positioning itself within this niche with what they term a “common operating system.” This system provides a unified access point for businesses to interact with the banking ecosystem.

The platform delivers a fundamental layer of microservices, facilitating the development of applications related to treasury, liquidity, and escrow management.

The Vision Behind TransBnk

“During our time in banking, we consistently received requests from clients for a single, integrated platform for transaction or corporate banking, all within a unified system,” explained Tambe, co-founder and CEO. “We decided to address this challenge. Our goal was to consolidate and integrate with multiple banks, creating a single platform accessible through web interfaces, mobile apps, SDKs, or APIs.”

Current Operations and Customer Base

Launched in 2022, the company currently collaborates with 60 banks, with 40 fully integrated into its platform for processing transactions, payments, and reconciliation. TransBnk also serves 220 customers, with 80% being merchants – including lenders, fintech companies, and nonbank financial companies (NBFCs) – and the remaining 20% being banks utilizing its software to offer corporate banking services.

Competition and Expertise Required

Globally, companies such as Finastra, Temenos, and Infosys’ Finacle are driving banking modernization through software platforms. In the U.S., Treasury Prime provides embedded banking solutions for enterprise clients. However, the Indian market currently has limited startups in this specific domain.

Success in this area demands extensive knowledge of banking infrastructure, including integration with existing core banking systems and connection to enterprise systems like ERPs and treasury platforms. Strong relationships with banks are also crucial for accessing and leveraging their data and workflows.

Financial Performance and Growth

TransBnk reports over 12x revenue growth in the past year, reaching approximately $12 million in annual recurring revenue. The company achieved profitability after taxes in February and maintains healthy gross margins of around 80%. It currently processes around 110 million transactions monthly, managing 11,000 bank accounts through over 1,500 APIs.

Future Plans and Funding Details

The Series B funding round included $4 million in secondary sales and participation from Fundamentum, Arkam Ventures, 8i Ventures, Accion, and Japan’s GMO Venture Partners. TransBnk intends to expand its operations beyond India, targeting markets in Southeast Asia and the Middle East, while continuing to develop its infrastructure platform.

The company also plans to extend its services to sectors such as real estate, pharmaceuticals, and renewable energy, as stated by Tambe to TechCrunch.

With this latest funding, TransBnk’s total funding reaches approximately $26 million. Tambe indicated that the company’s valuation has increased sevenfold since the previous funding round, though specific figures were not disclosed.