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As the financial services ecosystem undertakes a major digitisation drive, opportunities are opening up for startups such as Zeta and M2P Fintech that offer banking technology to banks and financial service providers. Bengaluru-based Zeta powers the consumer-facing PayZapp application for HDFC Bank while M2P Fintech built the core banking system for Unity Small Finance Bank. Now, these banking tech companies are looking to expand their client base and tap emerging opportunities in North America, West Asia, Africa and other South Asian countries as banks worldwide open up to digital payments , tech-based lending and such.
“Zeta is actively engaged with many of the top financial institutions in India as we speak, working closely with them to expand their credit offerings (and) launch digital-native credit products, leveraging NPCI’s Credit Lines on UPI scheme,” said Bhavin Turakhia, cofounder at Zeta. The firm is engaged in conversations with large banks in the US as well. Artificial Intelligence(AI) Java Programming with ChatGPT: Learn using Generative AI By - Metla Sudha Sekhar, Developer and Lead Instructor View Program Artificial Intelligence(AI) Basics of Generative AI : Unveiling Tomorrow's Innovations By - Metla Sudha Sekhar, Developer and Lead Instructor View Program Artificial Intelligence(AI) Generative AI for Dynamic Java Web Applications with ChatGPT By - Metla Sudha Sekhar, Developer and Lead Instructor View Program Artificial Intelligence(AI) Mastering C++ Fundamentals with Generative AI: A Hands-On By - Metla Sudha Sekhar, Developer and Lead Instructor View Program Artificial Intelligence(AI) Master in Python Language Quickly Using the ChatGPT Open AI By - Metla Sudha Sekhar, Developer and Lead Instructor View Program Office Productivity Zero to Hero in Microsoft Excel: Complete Excel guide 2024 By - Metla Sudha Sekhar, Developer and Lead Instructor View Program Astrology Vastu Shastra Course By - Sachenkumar Rai, Vastu Shashtri View Program Data Science SQL for Data Science along with Data Analytics and Data Visualization By - Metla Sudha Sekhar, Developer and Lead Instructor View Program Web Development A Comprehensive ASP.
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C.P. Gupta, Professor: Department of Finance and Business Economics, University of Delhi View Program M2P Fintech has clients in 30 countries worldwide and plans to expand its international business further.
Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories These firms have the backing of large investors, thanks to the market opportunity and the growth in banking tech. M2P Fintech, for example, has closed a $100-million funding round led by Africa-focused venture firm Helios Investment Partners at a valuation of between $800 million to $900 million, ET has learnt. A bunch of banks in Asia and India are participating in the round through strategic investments, but the company did not name the lenders since the internal processes are not closed yet.
ET had written on September 20 that Bank Muscat is participating in the round. “We will use these funds to grow our business in Africa and also in West Asia..
. We will keep an eye out for acquisition opportunities as well. looking at software services which are complementary to our business,” said Madhusudanan R, chief executive officer of M2P Fintech.
The company closed FY24 with an annual revenue run rate (ARR) of $70 million and is targeting around $100 million in ARR in this fiscal. It is looking at an eventual public listing over the next two to three years. Emerging opportunities M2P Fintech, Zeta and others operating in this space have two major things going for them.
One is Indian banks are opening up to working with fintechs for the core payments and other banking software pieces. Second, banks in emerging markets are keen to work with Indian fintechs, given the country’s success in digital payments with the National Payments Corporation of India (NPCI) and the Reserve Bank of India taking domestic payment services global. Card payment processor FSS and digital payment platforms Pine Labs and Juspay are not only building teams outside India but hiring senior talent to grab lucrative business deals there.
“Deals in those geographies will help us show steady revenue growth to Indian investors, so eventually, when we go public, there will be a predictability to our business,” said the chief executive of an Indian bank tech firm that has operations in West Asia. Closer to banks With regulatory changes taking place in the Indian fintech ecosystem, software providers are finding greater comfort working with banks rather than only fintechs. “We are working with banks to help them build and run new payment capabilities, credit offerings and also helping them build strong fintech partnerships,” Madhusudanan of M2P Fintech said.
Many large banks are using M2P’s software stack for their pay later offerings. Interestingly, banks which would typically work with traditional software developers for their technological needs are embracing cloud-based solutions and fintechs are finding greater adoption there. Turakhia of Zeta said banks want their partners to be able to handle scale, manage security and work with auditors besides bringing modern technology to the market.
While this is a major opportunity, selling software to banks is a lengthy and demanding process. Multiple industry insiders said companies need to have dedicated sales and servicing channels to keep large banks happy. “B2B (business to business) sales are undoubtedly complex and lengthy, but these are long-term, sticky contracts that ensure companies can continue to generate revenue over several years,” said Harsh Gupta, partner at Flourish Ventures, an investor in M2P Fintech.
“Given that banks and enterprise clients invest considerable time in evaluating and integrating these solutions, it is unlikely that they will churn in the short term.” Flourish Ventures has participated in M2P Fintech’s latest round of funding as well..
