fi: Neobank Fi makes foray into financial services with mutual funds

Bengaluru: Neo-banking platform Fi is making a foray into financial services, launching products such as mutual fund investing, peer-to-peer (P2P) investing and digital lending on its platform as well as other savings products.

To start, the company will offer about 600 index funds and will increase the number in the future, the company said during a virtual press conference on Thursday.

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

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Last year, bigger fintech companies, including Cred and BharatPe, started offering P2P loans to their users with the launch of Cred Mint and 12% Club, respectively. Both companies had partnered with Liquiloans for the deals.

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

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“The neobank currently has around one million users and we aim to grow that number to three million by the end of 2022,” co-founder 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 line of credit over the next 12 months, Gwalani added. It should also bring more banks to its platform. Currently, Fi provides banking services through a partnership with Federal Bank.

“We would partner with our existing banks and other financial partners for our lending business…we will act as a distributor,” Gwalani said.

Fi’s diversification comes as the company is in the midst of fundraising. Gwalani declined to share details of the current round.

“We are very happy with the valuations and I don’t see any major difficulty in raising funds today. It’s similar to how things were in our past rounds,” he said of the current funding climate.

Fi raised $50 million in November 2021 in a round led by Facebook co-founder Eduardo Saverin, B Capital. The round valued Fi at around $315 million. It had also raised $13 million from Ribbit Capital and Sequoia Capital in a funding round last year.

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

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

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

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