Mumbai-based Yelo, which operates a neo-bank (100% digital bank) for consumers, has raised an undisclosed sum in seed round from early stage investment firm Matrix Partners and social impact investment firm Omidyar Network India.
Flourish Ventures, another investment venture of the Omidyar Group that focuses on fintech investments, also participated in the funding round, the company said in a statement.
Existing investor Better Capital also participated in the funding round.
Yelo will use the capital to build vernacular language capabilities on its platform besides expanding the current team to 100 people within the next 12-18 months.
“Creating financial habits that solve the daily needs of aspiring India using reliable and affordable financial services are key to helping create a meaningful life,” said Anuradha Ramachandran, director, Omidyar Network.
0.5Bn FinHealth, which operates Yelo, was founded in January this year by Indian School of Business alumni and classmates Nilesh Agarwal and Abhishek Challa.
The startup operates a mobile-first neobanking platform and claims to offer consumers a personalised suite of financial products that address remittance, healthcare, education, ecommerce, and day-to-day cash flow management issues.
The startup’s target customer base is the next half billion people who will be online in the next five years, the company said in the statement.
The customer profile that Yelo is seeking to cater to includes manufacturing and construction workers, security guards, truck drivers, farmers, and gig economy workers.
“While India has progressed significantly in providing financial access to low-income consumers, customer engagement has lagged due to poor service levels or standardised offerings that simply do not meet people's real needs," said Agarwal, who is also the startup’s chief executive officer.
In June, Open Financial Technologies, a neobanking platform for small and medium enterprises (SMEs), raised $30 million in a Series B funding round led by New York-based investor Tiger Global Management.