Mabel Chacko is the co-founder of neo-banking platform Open, which became India’s 100th unicorn earlier this year. Over 2.3 million small and medium businesses in India use Open’s software to manage accounting, payroll, and bookkeeping services to track their daily expenses. Open is backed by blue chip investors such as Google and Tiger Global.

What’s the problem that Open is trying to solve? 

The problem that a lot of small businesses in India face is, your bank account is one thing, but your accounting is something else. There’s a huge ocean between these two worlds, and somehow, as a small business, you’re supposed to navigate it all. For example, if there was a payment for buying a laptop, it’s not just an expense, but also an asset coming into your company. This complex world of accounting cracks your brain up. The idea was [that] the bank account is where all the money comes in, and money goes out.

So probably, if I can build some intelligence around the current account of a business owner, then I can tell him, “Hey, this is what your cash flow looks like, this is the amount of money you can take [home] for so many months, because you tend to have so many payables in a month, or these are the bills that are due this month.” It gives business owners more insights on where they stand, and then, [is] eventually built into analytics to a point where, if they are probably an Amazon seller and there’s a Great Indian Festival sale coming up, then [it] understand[s] that the business would want to stock up on inventory  and get a short-term loan. So those were some of the things that we wanted to do with neo-banking. When we started out, we were practically the first in the small and medium enterprise (SME) segment to think of neo-banking.

Slowly, we started building in the layers to automate a lot of accounting tasks. By reconciling all transactions automatically, we built paths to issue credit cards and spend cards. Then, we built layers around Goods and Services Tax payments, and payroll management. 

What do you think convinced Google to invest in your business?

Google was in our series C round that happened in September 2021. They were able to see synergies in cross-selling on our platform, along with Google Cloud Platform.

We have been working with Google for almost two years now to enable Google AdWords through our platform to the base of [small business] users that we have.

We have a very deep integration with Google My Business, their free listing service for offline businesses to create an online profile. Normally, Google would send a postcard [to your address], and it has to come to your account with a code, and you put in the code [to verify]. But on Open, by virtue of creating a current account, a lot of things are automatically checked, and there’s [also] in-person verification that happens. So we have been able to reduce the time businesses take to get a verified listing on Google, to almost 48 hours.

At the start of the decade, banks viewed fintechs as disruptors out to get their business. How has the relationship between banks and fintechs evolved over the last few years? 

It has definitely improved a lot because banks have also upscaled their technology to start understanding what a fintech requires, and start catering to those kinds of needs. I definitely don’t feel that it has been bank versus fintech. It’s been more collaborative, at least in India.

When we started out, no one bank really had APIs for opening current accounts. We had approached ICICI Bank in 2017 when we had started out. While that was a requirement that they saw, it took them almost a year to build out that technology.

The only part of the problem when we started out was, not everything [is] available across a single bank. So you tend to have multiple banking partners. If I was doing neo-banking in any other part of the world, probably, I would just need one or two, or maybe three banks to work with. We are still getting there in terms of [the] readiness of banks to expose those APIs.