Slice acquired a 5% stake in Indian bank North East Small Finance in what analysts say is a key step in the unicorn fintech startup’s journey amid mounting challenges from the central bank that has brought down many companies. youths.
The Bangalore-based startup invested $3.42 million for the 5% stake in the small Guwahati-based financial bank in September, a regulatory filing showed.
The investment comes at a time when the Reserve Bank of India has clipped the wings of many fintech startups operating in the card and loan categories by requiring strict adherence to strict new guidelines.
It’s unclear how a stake in a bank, certainly a rare and ostensibly significant milestone for a startup, would be immediately beneficial to Slice, a $1.55 billion startup that counts Tiger Global, Insight Partners, Blume Ventures and Axis Bank among its backers. .
The company did not respond to a request for comment.
The world’s second most populous nation is going through an interesting phase as banks and fintech startups explore ways to improve their engagements. Federal Bank and SBM Bank India have courted many startups as clients in recent years as they try to boost their businesses.
The slowly larger banks, including HDFC and ICICI, have also expanded their discussions with younger companies. HDFC, the largest private bank in India, recently backed Mintoak, a SaaS platform that provides business services in India and other markets.
The Indian arm of SBM Bank began engaging with investors to raise capital late last year, presenting a vision of becoming one of the leading banking-as-a-service providers in the country, TechCrunch previously reported. Accel and Quona backed Shivalik Small Finance Bank last year.
But an increase in the proliferation of some China-linked predatory lending apps in recent years in the South Asian market has forced the central bank to introduce rules that have a far-reaching impact on many companies, including those that are not. involved in bad practices. faith business practices.
Incorporated in 2016, North East Small Finance Bank is a subsidiary of RGVN (NE) Microfinance serving clients in the Northeast region of the country. It counts Pi Ventures, SIDBI Venture Capital and Bajaj Group among its backers.
