Temasek invests in neo-banking platform Fi as digital lending apps adhere to new RBI rules

As part of its ongoing Series C round, the Bengaluru-based neo-banking platform If (whose parent company is EpiFi Technologies) raised $15 million of the Singapore Public Investment Company Temasek Holdings (via V-Sciences Investments Pte Ltd), and $2 million of the existing investor MCQ Holdingspursuant to two separate regulatory filings.

Fundraising is part of the larger Round C series under which the startup had raised $45 million of the existing investor Alpha Global Wave (formerly Falcon Edge Capital) in June.

It takes Fi total fundraising at $137.2 millionwith investors including Ribbit Capital, Sequoia Capitaland Facebook co-founder Eduardo Saverin Capital B among other things on his cap table.

Temasek’s fintech bet

Temasek has startups like PharmEasy, Licious, UpGrad, Unacademy, Shiprocket, ShareChat, Lenskart, Ola and PharmEasy in its portfolio. Last year, four of its portfolio companies – Zomato, PolicyBazaar, Devyani International and Cartrade – were listed on Indian stock exchanges.

Interestingly, Temasek has invested in another neo-banking platform Openwho became a unicorn last year following a $100 million Series C seed round led by the Singaporean firm.

It’s also a unicorn fintech funder FPL Technologiesthe parent company of the credit card platform A map.

Corpus for new products

Founded in 2019 by former Google Pay executives Sujith Narayanan and Sumit Gwalani, Fi is a financial app that offers digital bank accounts and financial advice to working professionals. It offers products such as a zero balance savings account and helps its users to track their expenses and organize their funds.

It competes with startups like Jupiter, Niyo, P10, and InstantPay in the consumer-focused neo-banking space.

In May 2022, Fi announced its foray into new financial services, including mutual fund investments, peer-to-peer (P2P) investments (Fi Jump), and digital loan on its platform, as well as other savings products. This would put it in direct competition with various other fintechs in the space.

For P2P lending, it has partnered with non-banking P2P Liquidloans.

In addition, he plans to add new credit products like personal loans, credit cards and line of credit over the next 12 months, and on board more banks. Currently, Fi provides banking services through a partnership with federal bank.

The fundraiser comes at a time when digital lending apps and third-party technology providers grapple with new digital lending rules released by the Reserve Bank of India (RBI).

The mandatory guidelines aim to push for greater transparency and disclosure to borrowers. They order lending apps, third-party fintechs, and regulated entities to abide by a host of rules, including disclosing statements of key facts, consenting borrower data, and disclosing the all-inclusive cost of digital lending to borrowers, as well as don’t allow an increase in credit limits without the consent of the borrower.

While some panel recommendations were accepted for immediate implementation, some were accepted in principle and will require further deliberation.

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