Banking technology platform Zeta has raised $250 million in a Series C funding round backed by SoftBank Vision Fund 2, giving the startup a valuation of $1.45 billion.
The funding marks the biggest backing by a single investor in the banking tech startup space worldwide, Zeta said in a press release on Monday (May 24). Previous investor Sodexo also participated in this round as a minority backer, and Avendus Capital was the financial advisor.
Founded by serial entrepreneur Bhavin Turakhia, who is the chief executive officer, and Ramki Gaddipati, who serves as chief technology officer, the startup has headquarters in Bangalore and Dubai, with a presence in the U.K., North America, LATAM, Europe and Asia.
“As the world moves to real-time payments and digital financial services, the number of transactions per day between banks and customers are expected to grow exponentially. With the digital acceleration, the financial services space was in need of “security, privacy, scalability and reliability as the core foundations,” Gaddipati said, adding that Zeta has solutions that “answer that need.”
This latest infusion of capital is being earmarked for expansion across the U.S. and Europe, including building out operations and adding to Zeta’s workforce. The overall cloud-native platform also will be upgraded to support the growing customer base, according to the release.
“Most banks are using decades-old software built at a time when mainframes and Cobol were in vogue. They have been slow to innovate and provide poor user experiences,” Turakhia said, adding that Zeta enables banks and FinTechs to “improve speed to market, agility, cost-to-income ratio and user experience.” He also said the startup is “privileged” to have SoftBank’s backing in disrupting “the stagnant landscape of banking tech.”
As banks started transitioning to a digital-first strategy, they often discovered that they had to patch technology from several platforms. Zeta’s Omni Stack aims to streamline the process, offering everything banks and FinTechs need to develop the new products and services, the company said.
In a PYMNTS interview in 2019, Turakhia said that the cross-integration of separate systems was critical to reducing friction and addressing common pain points banks experienced as they moved away from manual processes.