India-based payments bank Fino Paytech has received Rs 1.5bn ($22m) in funding from investors including insurance providers ICICI Prudential Life Insurance and ICICI Lombard, according to the Economic Times.
The corporates have acquired a 12% stake between them, valuing the company at approximtely $187m. Two other, unnamed investors also contributed to the round.
Fino Paytech operates a payments bank, a financial services model introduced in India in 2014. The banks are able to offer current and savings accounts, with a maximum deposit of Rs 100,000 per customer, but cannot market credit cards or loans.
The company was incubated by financial services firm ICICI Bank and originally launched in 2006 as a microfinance technology developer, but applied to be a payments bank in 2015. Oil business Bharat Petroleum paid approximately Rs 2.5bn for a 21% stake in July 2016.
Intel Capital, the corporate venturing division of semiconductor manufacturer Intel, contributed to a funding round of undisclosed size in 2011 alongside private equity firm Blackstone Group, which supplied $33m.
Intel Capital and International Finance Corporation (IFC), the private sector arm of multilateral organisation World Bank, also participated in a Rs 700m funding round in 2010 alongside financial services firm HSBC’s Asian Ventures Fund 3.
IFC and Intel Capital had previously taken part in a Rs 800m round in 2007 that included ICICI Bank, ICICI Lombard, and financial services firms IFMR Trust, LIC, Union Bank of India, Corporation Bank and Indian Bank.
Intel Capital, IFC, Blackstone and Headland Capital Partners were forced to reduce their stakes in Fino Paytech in 2015 when it applied to be a payments bank, in order to comply with regulations. At that point, Blackstone owned approximately 20%, while Intel, IFC and Headland each held 15%.
Fino Paytech’s latest funding round further supports the reduction of shares held by foreign investors. That stake has now fallen slightly below 49% meaning the company is thereby complying with regulations.