Neobank Fi marks financial services foray with mutual funds

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Bengaluru: Neobanking platform Fi is foraying into financial services, launching products such as mutual fund investments, peer-to-peer (P2P) investments, and digital lending on its platform along with other savings products.

To begin with, the company will offer around 600 index funds and increase the number going forward, the company said at a virtual press conference on Thursday.

Apart from mutual funds, Fi is also set to roll out a P2P investment option called ‘Fi Jump’ that allows users to earn up to 9% annual returns on their investments. For this, it has partnered with P2P non-bank Liquiloans. P2P investment is a financial product that directly connects investors to borrowers.

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Last year, larger fintech firms including Cred and BharatPe began offering P2P lending to their users with the launch of Cred Mint and 12% Club, respectively. Both firms had partnered with Liquiloans for the offerings.

Founded in 2019 by Sujith Narayanan and Sumit Gwalani, Fi is a financial app that offers digital bank accounts and financial guidance to working professionals. It offers products such as a zero-balance savings account and helps its users track spending and organise their funds.

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“The neobank presently has around a million users and we aim to take the number to three million by the end of 2022,” cofounder Gwalani said in an interaction with ET.

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The company also plans to introduce new credit products including personal loans, credit cards and a credit line over the next 12 months, Gwalani added. It is also expected to bring more banks to its platform. Currently, Fi provides banking services through a partnership with Federal Bank.

“We would be partnering with our existing banks and other financial partners for our lending business…we will play the role of a distributor,” Gwalani said.

Fi’s diversification comes as company is in middle of a fundraise. Gwalani refused to share details about the ongoing round.

“We are very happy about the valuations and I’m not seeing a major difficulty in raising funds today. It is similar to how things were during our old rounds,” he said on the current funding climate.

Fi raised $50 million in November 2021 in a round led by Facebook cofounder Eduardo Saverin’s B Capital. The round valued Fi at roughly $315 million. It had also raised $13 million from Ribbit Capital and Sequoia Capital in a seed round last year.

The Reserve Bank of India (RBI) said in February that it would soon come out with detailed guidelines on digital lending. The central bank is also keeping a close eye on the co-branded credit card space, which has attracted several fintechs such as Uni and Onecard.

Commenting on the regulatory landscape, Gwalani said that the company was closely monitoring the situation and that Fi was in compliance with all data norms. The company uses data to improve customisation for its customers.

“The markets are tough right now but if we look at the overall segment the number of people who have gone digital and have invested is very low. There is a huge market to tap,” he said.

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