rewrite this title With India’s corporate banking lagging decades behind consumer fintech, TransBnk raises $25M to bridge the gap | TechCrunch

While digitization has transformed banking for Indian consumers, corporate banking has been left in the slow lane — still relying heavily on clunky infrastructure, paper trails, and spreadsheet-heavy workflows. TransBnk wants to address that gap, and Bessemer Venture Partners has invested in the three-year-old startup in a $25 million round to accelerate its progress.

Over the past decade, India has experienced a significant boom in consumer fintech, driven by transformative shifts such as the rise of digital payments through the government-backed Unified Payments Interface (UPI) and the proliferation of payment aggregators. However, these innovations have done little to enhance the experience for businesses, especially in transaction banking, where payments, collections, and even account statements still rely on manual processes. Business customers often juggle multiple internet banking portals and rely on spreadsheets for reconciliation. This gap persists despite India being the world’s largest small and medium enterprise (SME) market, with nearly 75 million SMEs — all of which would benefit from more modern financial infrastructure.

The untapped potential in corporate banking represents a lucrative opportunity. India’s B2B fintech industry is projected to reach a market size of $20 billion by 2030, according to a February 2024 report by Chiratae Ventures and The Digital Fifth. The country is already home to 26 fintech unicorns with a combined market value of $90 billion, per data analyzed by JM Financial last year. However, most of these startups have focused primarily on innovations in payments and lending rather than core banking infrastructure.

Mumbai-based TransBnk, co-founded by former bankers Vaibhav Tambe, Lavin Kotian, Pulak Jain, and Sachin Gupta, positions itself in this space with what it calls a “common operating system” — a single window through which businesses can access the banking ecosystem. It offers a foundational layer of microservices, enabling use cases such as treasury, liquidity, and escrow management to be built upon.

“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,” said Tambe, co-founder and CEO, 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?”

Founded in 2022, the startup says it right now works with 60 banks, with 40 fully integrated into its platform to process transactions, payments, and even the core functionality reconciliation. It also has 220 customers, of which 80% are merchants, including lenders, fintechs, and non-bank financial companies (NBFCs), while the remaining 20% are banks that have white-labeled its software to provide corporate banking services to their customers.

Globally, companies like Finastra, Temenos, and Infosys’ Finacle are helping modernize banking through software platforms. In the U.S., players like Treasury Prime offer embedded banking solutions for enterprise customers. But in India, startups in this domain remain few and far between.

Building for this space requires deep expertise in banking infrastructure — integrating with legacy core banking systems and connecting them to enterprise stacks, such as ERPs and treasury platforms. It also requires close relationships with banks to access and build upon their data and workflows.

Over the past year, TransBnk says that it has grown its revenue more than 12x, reaching around $12 million in annual recurring revenue. The startup says it turned profitable after taxes in February and what it describes as healthy gross margins of roughly 80%. The company states that it enables around 110 million transactions monthly, covering 11,000 bank accounts and utilizing over 1,500 APIs.

The Series B funding round, which includes $4 million in secondary, also saw participation from Fundamentum, Arkam Ventures, 8i Ventures, Accion, and Japan’s GMO Venture Partners. The startup plans to expand beyond India and enter markets such as Southeast Asia and the Middle East, continuing to build its infrastructure platform layer. It also intends to expand its reach to sectors including real estate, pharma, and renewable energy, Tambe told TechCrunch.

With the latest funding, TransBnk has raised around $26 million in total. Its valuation grew 7x from the last round, Tambe said, without providing specifics.