Zeta, a banking software provider for banks and fintech startups, has raised $50 million from strategic investors at a $2 billion valuation.
New investments from the American Healthcare Company are up 70% from the $1.15 billion price tag (primoney) that the Bengaluru-based startup won in 2021. .
Founded in 2015 by Bhavin Turakhia and Ramki Gaddipati, Zeta helps banks launch and manage credit cards, checking accounts and loans using the latest technology and cloud infrastructure.
“In the banks, 60% to 70% of institutions are still operating on the mainframe. Many people were created before some of us were born,” Tulachia said in an interview. He compared it to a gradual shift in the industry towards cloud computing. There, banks managed their own data centers before first adopting services like AWS and Azure.
He expects a similar evolution of core banking technology, but has a higher interest as it involves replacing what is called the “bank mind and soul.”
Zeta, which counts MasterCard supporters, says it has signed a deal to serve 25 million accounts through its platform and add another 25 million. India’s flagship client is HDFC Bank, the country’s largest private lender, and has rebuilt its PayzApp digital payments platform using startup technology.
The startup is also in contact with Pluxee, a global corporate benefits provider, and Sparrow Financial, a US-based credit card issuer.
The US is the largest market for the Zeta, with India following its annual revenues of over $50 million. The startup has been in talks with several large US banks, but Zeta executives warned that some of these partnerships can take years to come true.
Zeta has invested in a platform of about $400 million since its inception and says it expects it to be profitable by March 2026. Its offerings include modules for core banking, payment processing, fraud detection and customer engagement.
“We intend to capture 25% of our market share over the next 10 years,” Turakhia said. “That’s never been done before because a large portion of the industry’s market share was captured decades ago and most have gone through acquisitions.”
Turakhia began his first venture with his brother Divyank in 1998. Along the way, they sold four internet businesses durablely for $160 million. Zeta is the third startup since that time co-founded by Bhavin. In August 2021, WordPress-Parent company Automattic supported Turakhia’s latest startup, Business-Email Provider Titan, valued at $300 million.
The company has 1,700 employees in the US, the Middle East and Asia.
Turakhia said startups do not need to raise capital. “This $50 million will probably be sitting in the bank. […] This investment reflects a reaffirmation of our journey. ”
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