Zeta Raises $250M Led by SoftBank - Becoming a Unicorn
Zeta Achieves Unicorn Status with $250 Million Funding
Zeta, a company specializing in assisting banks and fintech businesses with product launches, has recently reached a valuation of $1 billion or more, attaining unicorn status following a successful financing round.
Series C Funding Details
The banking technology firm, established by experienced Indian entrepreneur Bhavin Turakhia, announced on Monday the completion of a $250 million Series C funding round. This confirms a prior report by TechCrunch from mid-April, and was spearheaded by SoftBank Vision Fund 2.
Sodexo, an existing investor, also contributed to this funding round.
Valuation Growth
This new investment has valued the startup, with locations in Bangalore and Dubai, at $1.45 billion. This represents a significant increase from the $300 million valuation reported in the latter part of 2019. Mr. Turakhia clarified that a previous funding round was incorrectly identified as a Series C.
Addressing the Needs of Modern Banking
Zeta has created a comprehensive technology infrastructure designed to facilitate collaboration with banks, fintech startups, and various online consumer platforms.
The core concept centers on the fact that many banks, often relying on outdated technologies, lack the resources and expertise to deliver optimal experiences to their extensive customer base and the fintech companies they support.
Outdated Systems and Complex Vendor Relationships
“Many banks are still operating with technologies from the 1980s, frequently utilizing the COBOL programming language, which results in a suboptimal user experience,” Turakhia stated during a press conference on Monday.
He further explained that banks often compensate for these shortcomings by engaging with numerous vendors and technology partners. “The idea of constructing a complete banking infrastructure from the ground up hadn’t been considered – until now.”
Zeta’s Cloud-Native Solutions
Banks, possessing the necessary licenses to provide financial services, leverage Zeta’s cloud-native APIs and SDKs to introduce credit cards, debit cards, loans, and enhance the overall customer experience. They also collaborate with fintech companies through this platform.
“Zeta currently provides solutions for virtually any financial service imaginable,” he asserted.
Current Clients and Future Expansion
Currently, the startup serves 10 banks and 25 fintech firms. The newly acquired capital will be allocated towards expanding its client base and increasing its workforce.
SoftBank’s Continued Investment in India
This investment in Zeta marks the latest venture by SoftBank Vision Fund 2 in India. The Japanese conglomerate recently identified social commerce platform Meesho as another unicorn and is currently in advanced discussions to invest up to $500 million in food delivery service Swiggy, as well as exploring opportunities with SaaS startup WhatFix.
The Scale of Banking Software
“The global banking software industry is valued at $300 billion. A significant portion of banks still utilize technology that predates their customer base, negatively impacting user experience and engagement,” noted Munish Varma, a managing partner at SoftBank Investment Advisers, in an official statement.
India’s Unicorn Growth
Zeta is the 14th Indian startup to achieve unicorn status this year, fueled by increased funding activity from firms like Tiger Global, Falcon Edge, and SoftBank within India, the world’s second-largest internet market.
Entrepreneurial Background and Technological Foundation
Bhavin Turakhia, alongside his brother Divyank, initiated their first entrepreneurial endeavor in 1998. They subsequently sold four web-based companies to Endurance for a total of $160 million. Zeta represents Bhavin’s third startup venture, following the development of business messaging platform Flock and Radix.
Security and Scalability
“The evolving digital landscape presents increasing challenges related to security, privacy, and data protection for banks. The industry requires systems that are fundamentally built with security, privacy, scalability, and reliability as core principles. Zeta’s Omni Stack addresses this critical need,” stated Ramki Gaddipati, co-founder and chief technology officer of Zeta, in a press release.
https://techcrunch.com/2021/05/12/for-unicorns-how-much-does-the-route-to-going-public-really-matter/