The latest funds will be used to roll out new products, strengthen the team and improve the startup’s technology infrastructure
Bengaluru, India-based fintech Application Programming Interface (API) infrastructure startup Setu has raised US$15 million in a Series A funding round led by Falcon Edge Capital and Lightspeed Venture Partners US, according to a statement by Setu Co-founder and Chief Evangelist Nikhil Kumar. Existing investors Lightspeed India Partners, and Bharat Inclusion Seed Fund also participated in the financing round.
According to the company statement, the new investment will be used to strengthen the team, roll out new products, and improve the technology infrastructure of the company.
With the latest financing, Setu’s total funding amount has reached $18.5 million, according to Crunchbase. The startup had raised seed funding of $3.5 million in April, 2019 from Bharat Inclusion Seed Fund and Lightspeed India Partners.
With the latest investments, Lightspeed’s shareholding has gone up to 25.31% while Falcon Edge now controls 9.62% and Bharat Inclusive Seed Fund’s share stands at 2.94%, according to a YourStory report. Furthermore, the Co-founders Sahil Kini and Nikhil Kumar have diluted their combined stake from 78.13% to 55.42% in this round of financing.
Founded in 2018, Setu’s valuation stands at $50 million after this investment, according to Entrackr. At the time of writing, Setu had not responded to a confirmation request from Jumpstart.
Setu, meaning ‘bridge’ in Sanskrit, works with regulated financial institutions like Banks and Non-Banking Financial Companies (NBFCs), absorbs their regulatory complexities, and allows developers to easily build applications to offer financial services based on their API infrastructure.
The startup offers open APIs across four categories: bills, savings, credit, and payments. Developers can access Setu’s platform and build applications that go through a rigorous Developer Certification Program before going live.
“Setu’s banking as a service will now enable a number of new entrepreneurs to build for Bharat like never before,” said Bharat Inclusion Seed Fund Partner Sanjay Jain, in the statement.
Setu estimates that over a billion people in India do not have access to formal financial products and services due to poor product designs, high distribution costs, and legacy technology. The startup aims to provide the infrastructure for companies to cater to this underserved market with “formal sachet-ized” financial products.
According to Falcon Edge Managing Partner Navroz Udwadia, “By supplying the critically needed “pipe” infrastructure that allows traditional and non-traditional financial products to reach a new class of Indian consumers, Setu can drive the sachetisation of the traditional financial product while enabling traditional public and private lenders to reach a wider cross-section of India in a digitally enhanced manner.”
According to their website, Setu’s flagship product Collect allows bill payment collection from over 400 apps and more than 3 million offline touch points using Bharat Bill Payment System (BBPS) and Unified Payments Interface (UPI).
“We are on a decades-long path to building financial infrastructure that will be used for generations to come. As a founder, I’m most excited about the position we find ourselves in — with a world-class cross-functional team, some of India’s largest and most respected financial institutions as banking partners, and customers who are already tasting success by building on top of our APIs,” said Co-Founder & Chief Executive Officer (CEO) of Setu Sahil Kini.
Co-Founder and Chief Evangelist of Setu Nikhil Kumar said, “We want to reimagine financial services for every Indian, rich or poor, by enabling developers to build products that weren’t possible before. Patience, capital, experimentation, and stellar execution are essential to make this magic happen. With this raise, we’re looking for more creators, geeks, and leaders to join our growing tribe of 30 Setuzens.”
Header Image courtesy of Setu