Niyo, a neobank, is keen to enter the asset management space and mulling to apply to
Sebi for a mutual fund licence, a company official said on Thursday. The Bengaluru-based fintech firm, which started off with prepaid instruments, is targeting to more than double its user base to 5 million by the end of
FY22 from the present 2 million on the back of new tie-ups with players in the financial services space.
“We are keen to enter the AMC space and are in the process of exploring the idea of applying for a licence,” its co-founder and Chief Technology Officer Virender Bisht told .
In December, Sebi had allowed fintech firms to apply for MF licences.
Niyo had had last year announced the acquisition of Goalwise, an MF distribution platform. The company already distributes insurance policies, has a presence in wealth management through an acquisition and also offers stock buying.
Niyo on Thursday announced a tie-up with Equitas Small Finance Bank, wherein it will be launching a co-branded digital first savings accounts platform initially aimed at the millennial segment.
Its founder and chief executive Vinay Bagri said the platform has features like an interest rate of over 7 per cent, and explained that savings account and wealth management offerings, when given together, can get stickiness to a relationship and make an account last for over a decade.
Niyo, which already has a presence on the wealth management side through an acquisition and also allows users to trade in equities through it, is targeting to add 1 million users from the partnership with Equitas by the end of 2021.
Equitas’ Chief Digital Officer Vaibhav Joshi said the lender has 8 lakh savings accounts at present and is aiming to more than double the number through the partnership.
Bagri said it is a savings account and wealth management proposition to start with, but eventually Niyo will be looking at offering lending solutions to the same segment as well.
Initially, there is no revenue generation possibility, but eventually once the user starts availing mutual funds or loans, it will help in revenue booking, Bisht added.
Bisht also said Niyo is also looking at a newer funding round later in 2021 to fuel its expansion, but stressed that the saving account opening partnership, its most ambitious business initiate yet, is not capital intensive.
The fintech company will get another 0.5 million users from a blue collar workers-focused offering for which it has tie-ups with other lenders, Bisht said, exuding confidence that the target of 5 million users is achievable.
At present, Niyo is a “growing” company with some of its offerings reporting operating profits, he said.
The biggest hindrance for the company for growing users was the inability to offer interest on deposits and also lack of UPI gateway, which gets sorted with the partnership with Equitas, Bisht said.