Startups looking to expand the reach of financial services continue to receive a nod from investors. Zeta, a fintech firm that runs a full stack neo-banking platform and offers enterprise payments solutions, said today its valuation reached $300 million in its maiden outside funding.
Sodexo BRS funded Zeta’s Series C round to take a minority stake in the company. Zeta executives declined to reveal the size of the funding, but a person familiar with the matter told TechCrunch the amount was less than $60 million.
This is the first time Zeta — or its CEO and co-founder Bhavin Turakhia — has raised money from an outside party, he told TechCrunch in an interview.
Turakhia, 39, has co-founded a number of web companies over the years, which he sold for $160 million in 2014, and team collaboration and productivity app Flock. Flock too has not raised any outside capital to date.
Zeta operates in Asia and Latin America and counts as its potential clients companies and banks looking to bring retail and corporate fintech products. Its full stack cloud-native neo-banking platform supports issuance of credit, debit and prepaid products. Its enterprise solutions features support for TnE cards, P-cards, expense management, salary disbursement and corporate gifting.
The firm has already amassed over 2 million users, and three different banks and financial institutions, including Sodexo, that use Zeta’s platform, and more than 14,000 corporate clients, including Amazon. Multiple banks in India are using Zeta’s corporate gifting service.
The new capital will be used to expand the company’s business in the United States, United Kingdom, Europe and Southeast Asia, Turakhia and Ramki Gaddipati, the startup’s CTO and co-founder, told TechCrunch in an interview. It has already signed contracts with many partners to facilitate the expansion in the next six months.
The firm, which today employs about 450 people, also plans to grow its team and set up offices in many more places across the globe.
“There hasn’t been many zero to one innovations in the banking ecosystem in the last 20 years,” said Turakhia. “If you look at the banking space, it has been dominated by licensed software from legacy organizations. Many of these companies still provide most of the stacks that run most of the payment systems around the world for banks and non-banks.”
So like a growing number of companies, Zeta is betting that it is a pivotal time to disrupt this. “That was the genesis of starting Zeta, building a new and innovative technology stack that enables interesting use cases for banks and other bank-line financial institutions that want to issue credit, debit, or prepaid products and provide their customers with enhanced functionalities,” he said.
And that opportunity is what led Turakhia to seek outside capital, he said. “In the next five to seven years, I want to make Zeta 20 to 30 times bigger than any exit I have ever had,” he said.
Additionally, Zeta also saw value that Sodexo, which operates globally, could bring to its platform.
In a statement, Aurelien Sonet, CEO, BRS at Sodexo, said, “Sodexo has been a strategic partner of Zeta since 2017. This investment will enable the Sodexo group to benefit from Zeta’s comprehensive suite of solutions and offer a seamless payment experience to our consumers. Zeta and Sodexo are already working together on deploying Zeta’s platform across several Sodexo subsidiaries across different regions.”