Indian fintech unicorn Slice acquires stake in a bank

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Slice has obtained a 5% stake in the Indian financial institution North East Smaller Finance in what analysts say is a critical step in the unicorn fintech startup’s journey amid mounting difficulties from the central bank that has toppled lots of younger companies.

The Bengaluru-headquartered startup invested $3.42 million for the 5% stake in the Guwahati-headquartered tiny finance financial institution in September, a regulatory filing showed.

The financial investment arrives at a time when the Reserve Lender of India has clipped the wings of lots of fintech startups operating in cards and lending groups by mandating rigid compliance with stringent new recommendations.

It’s unclear how a stake in a lender, admittedly a scarce and ostensibly important milestone by a startup, would be quickly useful to Slice, a $1.55 billion startup that counts Tiger Worldwide, Perception Partners, Blume Ventures and Axis Financial institution amid its backers.

The business did not reply to a ask for for comment.

The world’s next most populous nation is undergoing an interesting period of time as banks and fintech startups take a look at techniques to enhance their engagements. Federal Bank and SBM Financial institution India have courted numerous startups as prospects in recent years as they attempt to supercharge their firms.

Slowly and gradually more substantial financial institutions, together with HDFC and ICICI, have also expanded their deliberations with younger corporations. HDFC, the major personal lender in India, just lately backed Mintoak, a SaaS system that supplies merchant expert services in India and other markets.

The Indian arm of SBM Bank started participating with traders to elevate cash late very last calendar year, pitching the vision of getting just one of the top banking-as-a-assistance companies in the nation, TechCrunch documented before. Accel and Quona backed Shivalik Small Finance Bank final yr.

But a increase in proliferation of some predatory China-connected lending apps in latest a long time in the South Asian sector has forced the hands of the central lender to introduce regulations that have a far-achieving effect on several firms, which includes individuals not concerned in negative-religion enterprise practices.

Incorporated in 2016, North East Tiny Finance Lender is a subsidiary of RGVN (NE) Microfinance that serves clients in the north eastern location of the place. It counts Pi Ventures, SIDBI Undertaking Cash and Bajaj Team among the its backers.

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