Neobanks are the new freshmen in the fintech space that are seizing the industry by a downpour not only in India but across the world. Managed by 0.5Bn FinHealth, Yelo is a digital-only, mobile-first neobank concentrated on serving mass-market consumers – the ‘Next Half Billion’ people who will be coming online in the next five years. It offers a leading basket of financial products that are meant to satisfy their unique needs, unlike the definitive offerings from traditional financial service providers. Founded in January last year by Indian School of Business alumni and classmates Nilesh Agarwal and Abhishek Challa, their personalised neo banking service, ‘येLo’, delivers a range of innovative products and services to address unexpected short-term needs such as day-to-day cash flow management and long-term conditions such as future medical shocks.
As a neo-banking startup, Yelo offers savings, remittance and micro-credit solutions to clients with a monthly salary of less than Rs 30,000, mainly to propel financial inclusion among those not directly catered to by banks. It is an internet-first bank. Users can open an online account for banking, credit, payment solutions and remittance. Users also receive a prepaid card linked with the account.
The startup has joined hands with banks such as the Federal Bank and ICICI to offer its digital lending services through a smartphone-based application. As is particular in such partnerships, Yelo helps banks acquire customers that they would not ordinarily pursue due to the lack of creditworthiness or credit score. It offers a prepaid card to track all usage and cashflow through this card — presumably, to build more products — it can only be used for digital transactions. YeLo Bank, a digital-only, mobile-first neobank focused on serving mass-market consumers, has won the AWS Startup Architecture Challenge of the Year 2020 India finals. AWS Startup Architecture Challenge is an endeavour as part of which AWS Startup customers in select regions get the opportunity to showcase their different and innovative architecture platforms built on AWS. As a regional winner, YeLo has been awarded $25k in AWS Credits.
In his winning pitch, Nishant Chandra said that the startup built the neo banking stack on AWS. He also said that the services within AWS constitute a significant portion of all the functionality required to run a retail bank while again powering the banking solution.
Neobank Yelo Raises Funding from Matrix Partners, Omidyar, others
Neobanking startup Yelo has boosted an undisclosed amount in its first round of institutional funding from Matrix Partners India Including Omidyar Network India, Flourish VC, and Better Capital. Funds raised will be used to build a local language-based experience – a must-have to reach low-income consumers in the country – and to expand the current team to 100 people in the next 12-18 months. Now, as the world economy slowly recovers from the coronavirus pandemic, the company expects digital banking to become more applicable and appropriate than ever before, and AWS has enabled येLo to offer low-cost financial services to millions of people. “We believe improving the financial health of the consumer can happen only when we combine innovation on product design, user experience, and platform architecture,” Chandra explains, “And that’s what we constantly challenge ourselves with.”