Digital transformation has significantly impacted consumer banking in India, yet corporate banking is lagging behind. It remains mired in outdated processes involving cumbersome infrastructure, paper trails, and spreadsheets. Bessemer Venture Partners is stepping in to bridge this gap with a new $25 million investment in a three-year-old startup.
Over the last ten years, India’s consumer fintech sector has boomed, spurred by initiatives like government-supported unified payment interfaces (UPIs) and a rise in digital payment solutions. Despite this progress, the transaction banking experience hasn’t improved much. Payments, collections, and account statements often require manual handling. Business clients frequently juggle multiple online banking platforms and fall back on spreadsheets for settlements. This situation persists even as India hosts the world’s largest small and medium-sized enterprise (SME) market, with around 75 million SMEs—each poised to benefit from more modern financial systems.
The underdeveloped state of corporate banking offers a unique opportunity. The B2B fintech landscape in India is expected to grow to a market size of $20 billion by 2030, according to a recent report from Chiratae Ventures and Digital Fifth. Currently, there are 26 fintech unicorns in India, which, as analyzed by JM Financial, represent a combined market value of $90 billion. However, most innovations focus on payments and financing, often neglecting core banking infrastructures.
Transbnk, based in Mumbai and co-founded by former bankers Vaibhav Tambe, Lavin Kotian, Pulak Jain, and Sachin Gupta, is working in this space. Described as a “common operating system,” it offers a foundational layer of microservices to build various use cases, including those for the Ministry of Finance, liquidity, and escrow management.
“In the age of banking, we envisioned a single integrated platform for corporate banking,” co-founder and CEO Tambe mentioned in a discussion. “We aimed to integrate multiple banks into one platform, leveraging web interfaces, mobile apps, SDKs, or APIs.”
Established in 2022, Transbnk currently collaborates with 60 banks, of which 40 are fully integrated into the platform. It manages transactions, payments, and adjusts core functionalities. Among its 220 clients, 80% are merchants, which include lenders, fintechs, and non-banking finance companies (NBFCs), while the remaining 20% are banks that offer white-label software for corporate banking services to their clients.
On a global scale, firms like Finastra, Temenos, and Infosys’ Finacle provide software solutions to modernize banks. In the U.S., companies like Treasury Prime deliver embedded banking solutions targeted at corporate customers. In contrast, India’s market has relatively few startups addressing this need.
Building a solution in this sector requires considerable expertise in banking infrastructure. It necessitates integration with legacy systems and connection to enterprise stacks like ERPs and treasury platforms, along with strong relationships with banks to facilitate data access and workflow development.
Over the past year, Transbnk reported that its revenue multiplied more than twelve times to approximately $12 million in annual recurring revenue. The startup reached profitability by February, boasting a robust total margin of around 80%. It claims it facilitates about 110 million transactions monthly, manages 11,000 bank accounts, and utilizes over 1,500 APIs.
The Series B funding round included a $4 million secondary investment, with contributions from Businder, Arkam Ventures, 8i Ventures, Accion, and Japan’s GMO Venture Partners. Looking ahead, Transbnk plans to expand beyond India into markets like Southeast Asia and the Middle East, continuing to enhance its infrastructure platform and target sectors such as real estate, pharmaceuticals, and renewable energy, as noted by Tambe.
With this latest round, Transbnk has raised a total of around $26 million, with its valuation reportedly rising seven times since the previous funding round.
