Although digitisation has revolutionized banking for Indian consumers, corporate banking remains lagging behind, still relying on outdated infrastructure, paper records, and spreadsheet-driven processes. TransBnk aims to bridge that divide, and Bessemer Venture Partners has made a $25 million investment in the three-year-old startup to boost its growth.
In the last ten years, India has witnessed a substantial rise in consumer fintech, propelled by significant changes like the emergence of digital payments via the government-supported Unified Payments Interface (UPI) and the growth of payment aggregators. Despite these advancements, the business banking experience has not improved, particularly in transaction banking, where manual processes still dominate payments, collections, and even account statements. Business clients often navigate various internet banking platforms and depend on spreadsheets for reconciliation. This ongoing issue persists even though India boasts the largest small and medium enterprises (SMEs) market globally, with close to 75 million SMEs, all of which could greatly benefit from updated financial infrastructure.
The unexploited potential in corporate banking provides a lucrative chance for growth. India’s B2B fintech sector is expected to achieve a market size of $20 billion by 2030, according to a February 2024 report by Chiratae Ventures and The Digital Fifth. Currently, the country has 26 fintech unicorns with a total market value of $90 billion, as per data analyzed by JM Financial last year. However, most of these companies have primarily concentrated on innovations related to payments and lending instead of focusing on foundational banking infrastructure.
TransBnk, based in Mumbai and co-founded by former bankers Vaibhav Tambe, Lavin Kotian, Pulak Jain, and Sachin Gupta, positions itself within this niche by offering what it defines as a “common operating system” – a unified platform allowing businesses to access the banking ecosystem. It provides a fundamental layer of microservices that support various applications such as treasury, liquidity, and escrow management.
“During our banking days, we always got a lot of customers asking us for a single, consolidated platform for transaction banking or corporate banking on a single particular stack,” Tambe, co-founder and CEO, shared in an interview. “And we thought, let’s take up this challenge… The idea was that can we consolidate and integrate with multiple banks and then create a single platform, be it in the form factors, like the web interface or mobile app, or maybe SDKs, or API?”
Established in 2022, the startup reports that it currently collaborates with 60 banks, with 40 fully integrated into its platform to handle transactions, payments, and central reconciliation functions. It has also onboarded 220 clients, 80% of whom are merchants, including lenders, fintech firms, and non-bank financial companies (NBFCs). The remaining 20% consists of banks that have rebranded its software to deliver corporate banking services to their clientele.
Internationally, companies such as Finastra, Temenos, and Infosys’ Finacle are working to modernize banking through software platforms. In the U.S., businesses like Treasury Prime provide embedded banking solutions aimed at enterprise customers. However, in India, there are still very few startups operating in this area.
Developing solutions for this sector necessitates extensive knowledge of banking systems — merging with established core banking platforms and linking them to enterprise systems like ERPs and treasury solutions. Additionally, it demands strong partnerships with banks to tap into and enhance their data and workflows.
In the past year, TransBnk claims its revenue has increased over 12 times, reaching approximately $12 million in annual recurring revenue. The startup reports achieving profitability after taxes in February, boasting what it calls healthy gross margins of around 80%. The company indicates that it facilitates approximately 110 million transactions each month, managing 11,000 bank accounts and employing over 1,500 APIs.
The Series B funding round featured $4 million in secondary investment and included contributions from Fundamentum, Arkam Ventures, 8i Ventures, Accion, and Japan’s GMO Venture Partners. The startup aims to extend its operations beyond India and venture into markets like Southeast Asia and the Middle East, while continuing to develop its infrastructure platform layer. Furthermore, it plans to broaden its outreach to industries such as real estate, pharmaceuticals, and renewable energy, according to Tambe’s comments to TechCrunch.
With this latest funding, TransBnk has secured a total of around $26 million. Its valuation surged 7 times since the previous round, as stated by Tambe, although he did not provide exact figures.
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