Indian fintech unicorn Slice acquires stake in a bank

by Ana Lopez

Slice has acquired a 5% stake in Indian bank North East Small Finance in what analysts say is an important step in the unicorn fintech startup’s journey amid mounting challenges from the central bank that has toppled many early-stage companies.

The startup headquartered in Bengaluru invested $3.42 million in September for its 5% stake in the small financial bank headquartered in Guwahati, a filing showed.

The investment comes at a time when the Reserve Bank of India has clipped the wings of many fintech startups operating in card and lending categories by mandating strict adherence to stringent new guidelines.

It’s unclear how a stake in a bank, admittedly a rare and ostensibly significant milestone by a startup, would immediately benefit Slice, a $1.55 billion startup that has Tiger Global, Insight Partners, Blume Ventures and Axis Bank at its heart. financiers charge.

The company did not respond to a request for comment.

The world’s second most populous country is going through an interesting time as banks and fintech startups explore ways to improve their engagement. Federal Bank and SBM Bank India have been courting many startups as clients in recent years as they try to boost their business.

Slowly larger banks, including HDFC and ICICI, have also expanded their consultations with younger companies. HDFC, the largest private bank in India, recently backed Mintoak, a SaaS platform that provides trading services in India and other markets.

SBM Bank’s Indian arm began talking to investors late last year to raise capital, presenting its vision to become one of the top banking-as-a-service providers in the country, previously reported. . Accel and Quona supported Shivalik Small Finance Bank last year.

But an increase in the proliferation of some predatory China-linked lending apps in recent years in the South Asian market has forced the central bank to introduce regulations that have far-reaching consequences for many companies, including those not involved are bad practices. believe business practices.

Established in 2016, North East Small Finance Bank is a subsidiary of RGVN (NE) Microfinance serving clients in the northeastern region of the country. It counts Pi Ventures, SIDBI Venture Capital and Bajaj Group among its backers.

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