_20240821131023_original_image_38.webp)
TransBnk, a Mumbai-based transaction banking platform, said that it successfully raised USD 4 million in Series A funding round led by 8i Ventures, the early-stage India-focused VC fund, including M2P, Slice, Easebuzz, among others. The round was co-led by Accion Venture Lab, a global impact investor backing early-stage fintech startups. The round also saw contributions from GMO Venture Partners, Ratio Ventures, Force Ventures along with a prominent group of family offices, institutions, and angel investors.
The company will utilise these funds to expand the network of banking partners, while also pursuing global expansion plans with a focus on Middle East and South East Asia markets, as per its press release. It aims to leverage the first-mover advantage in these regions and build market share.
Vaibhav Tambe, CEO and Co-Founder of TransBnk, said, "Transaction Banking has emerged as a transformative force in the banking and technology space, holding USD 1 trillion global market potential and is projected to be a USD 2 trillion industry by 2030. In India, we expect the USD 200 Bn unsecured lending market to be disrupted with Transaction Banking tapping cash flows. This presents a significant opportunity to us, considering our domain expertise in Banking & Technology across various segments like Lendingtech, Regtech, and Paytech.”
Traditional BFSI incumbents, encumbered by legacy systems, have been grappling with the challenges of meeting the new regulatory requirements for complex multi-party transactions. Sensing this challenge as an opportunity, TransBnk was conceived in 2022 by experienced veterans in transaction banking. It provides the rails on which incumbent and new-age BFSI players can build new use cases for various business segments like lending, payments, and onboarding.
Vikram Chachra, Founding Partner at 8i Ventures, remarked, “TransBnk is revolutionising India’s trillion-dollar transaction banking sector by empowering banks to offer advanced transaction services, bridging the technology gap.”
The banking industry has recently raised concerns about a significant decline in CASA (Current Account Saving Account) deposits, a key source of low-cost funding for banks. As of 14 June 2024, deposits have fallen by Rs 3.5 lakh crore, or 1.6 per cent year-to-date, compared to the same period last year. This decline poses a major challenge, with the CASA ratio dropping to its lowest level in nearly a decade for some institutions.
In such a situation, TransBnk claimed that it emerged as a much-needed solution, connecting banks with FinTech, NBFCs, P2P players, PPI and PG merchants, builders, and developers - entities that typically maintain large current account or escrow balances. By linking these high-balance clients with banks, TransBnk aims to strengthen CASA deposits and mitigate the issue of shrinking low-cost funding sources for Indian banks.
Rahil Rangwala, Managing Partner at Accion Venture Lab, stated, “Complex multi-party transactions can create bottlenecks for micro and small entrepreneurs who are often left out of, or poorly served by, the financial system and lack sufficient access to supply chain and marketplace solutions needed for growth. With strong revenue growth, TransBnk has proven that its transaction banking model can make these transactions easier, increasing access.”
