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Fintech

Published on: June 1, 2021, 6:05 a.m.
Open empowers clients with automation
  • Achuthan and Chacko are attacking small companies’ financial pain points

By Sekhar Seshan. Consulting Editor, Business India

Small and medium enterprises (SMEs) and start-ups faced a series of challenges in managing their business finances, Anish Achuthan and Mabel Chacko found. The duo, both serial entrepreneurs in financial technology solutions, joined forces with Ajeesh Achuthan and Deena Jacob in 2017 to offer these companies a solution. 

“I realised during various interactions with business owners and entrepreneurs that business banking is broken for small businesses,” says Anish Achuthan, who has worked with many of these for 15 years through his previous payment start-ups and as part of other fintech companies. “They struggle to track their cash flows as they have to work with multiple disjointed systems like a banking dashboard, invoicing tool, payroll and accounting software that makes reconciliation a pain.”

That, adds Chacko, was when they thought the best way to solve this problem would be to turn a business current account into a financial operating system. “If we can track every payment that comes in and moves out of your bank account, we can automate income, expenses and accounting for your business,” she explains.

This led to the start of Open Financial Technologies, through which they offer businesses a banking platform with integrated tools for invoicing, billing, accounting and payroll built into the internet banking dashboard, so that they can automate their finance. In the three years since they began, Open now boasts a customer list of a million, processing $24 billion in transactions annually to make it the largest growing SME-focussed neo-banking platform globally. 

Open, which is Asia’s first neo-banking platform for SMEs and start-ups, offers its customers a business account in partnership with banks that helps them automate and run their finances effectively. Originally funded by Beenext, Japan’s Recruit Strategic Partners, Unicorn India Ventures, Art Capital and other angel investors, Open has recently raised a Series B funding of $30 million led by Tiger Global, Tanglin Venture Partners Advisors and existing investors 3one4 Capital, Speedinvest and BetterCapital AngelList Syndicate.

Scaling user base

The initial growth strategy, explains Achuthan, who is the chief executive officer, was to partner with banks, which would also distribute Open’s platform to their own clients. “This gave us a lot of insights into the customer pain points and distributing the products to Tier II and Tier III audiences, which really helped us in scaling our user base,” he says.

Using its existing customers as evangelists for word-of-mouth references, Open has a million customers registered on its platform. In February 2021, it acquired GST automation platform Optobizz for $5 million in a stock-plus-cash deal. With 800,000 businesses using it, this takes Open’s customer base to 1.8 million SMEs.

Additionally, they are adding nearly 60,000 new businesses every month on the platform. “We have also increased our bank distribution platforms to seven banks, which will help us scale our customer base and also strengthen our mobile platform to get to our target of five million users by the end of next year,” Achuthan says.

According to Nitin Dhawal, co-founder & CEO, Scogo Networks, which offers on-demand tech support to enterprises, Open helped them automate their business accounting and transactions. “We have to pay thousands of service partners many times a month. It's cumbersome to make such transactions via digital wallets,” he explains. “They have automated this to manage the accounting for these transactions -- and as their name suggests, they are open and transparent,” Dhawal adds.

At B2B SaaS product company SaleAssist.ai, which is an AI-powered live video commerce solution for e-commerce businesses, co-founder & CEO Deep Malik says: “Initially, we didn’t even have a credit card for company-based transactions. We didn't have access to any particular solution to subscribe to some of the online software and services, and initiate social media ads.” Enter Open and its ‘Founder One’ card. “This empowered us to purchase online subscriptions easily,” Malik explains. “We are also working with Open to create a customised solution that allows for payments to be split on a real-time basis between us and e-commerce businesses.” 

Open was awarded the ‘Most Innovative Digital Bank’ by the Internet and Mobile Association of India at the 11th India Digital Awards 2021. It was also featured among the top five emerging digital banking start-ups by the Austria-headquartered data service company Startus Insights. With all this going for it, the company aims to become the ‘be-all and end-all’ for SMEs and start-ups in India.

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