Dubai tech startup Zeta raises $250m to accelerate growth

Dubai-based banking tech startup, Zeta, has secured $250m in investment from SoftBank Vision Fund 2, it announced on May 24.

The proceeds will be used to accelerate Zeta’s growth in the Middle East, the US and Europe, including scaling its operations, team, and platform to meet growing customer demands, a statement said.

This Series C investment values Zeta at $1.45bn. Avendus Capital acted as the financial advisor on this transaction.

“Most banks are using decades old software built when Mainframes and Cobol were in vogue. They have been slow to innovate and provide poor user experiences. With Zeta, FIs can leverage a modern, cloud native platform and improve speed to market, agility, cost to income ratio and user experience,” said Bhavin Turakhia, CEO and co-founder, Zeta.

The startup’s Omni Stack, which provides the functionality banks need to launch new products relevant to consumers, comprises of

• Zeta Tachyon credit, debit and prepaid processing with card controls and personal finance management capabilities;
• Zeta Tachyon Loans – a buy-now-pay-later and personal loan management platform;
• Zeta Tachyon Deposits – a modern core for DDA, checking accounts, savings accounts and deposits;
• Zeta Tachyon Mobile – a customisable mobile app for credit cards, checking accounts, prepaid, loans, Buy-Now-Pay-Later, personal finance management and more

Zeta’s client base includes over 10 banks and 25 fintechs across 8 countries, including Sodexo – an issuer of employee benefits and rewards; and HDFC Bank. Sodexo also participated as a minority investor in the funding round.

Munish Varma, managing partner, SoftBank Investment Advisers, said: “Banking software is a $300bn industry globally. Most banks still employ technology which is significantly older than their customers, impacting user experience and engagement. Zeta’s modern Omni Stack will drive banking software upgrades catering to the digital consumer, and innovations in financial services globally.”

“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. The increasingly digital world represents evolving security, privacy and data protection challenges to banks. The industry needs systems reinvented with security, privacy, scalability and reliability as the core foundations,” noted Ramki Gaddipati, CTO and co-founder, Zeta.

An Aite Group study found that 61 per cent of financial institution executives believe investment in newer technologies is the most important measure they must take to improve their customer experience, the statement added.