Fintech Jupiter in Talks to Acquire Stake in SBM Bank India
Neobank Jupiter, a Bengaluru-headquartered startup backed by Tiger Global and NuBank, is currently in discussions to acquire a stake in SBM India, the local arm of SBM Bank. According to sources familiar with the matter who spoke to TechCrunch, Jupiter is looking to purchase a 5% to 9.9% stake in SBM India, although the deal has not yet been finalized and will require approval from the Reserve Bank of India.
This potential acquisition is part of a broader trend in the Indian fintech industry, where startups are increasingly seeking strategic partnerships with traditional banking institutions. For example, Indian fintech Slice received approval from the RBI last year to merge with North East Small Finance Bank, allowing them to expand their services to a wider audience.
Venture capital firms are also getting in on the action, with Lightspeed and Sorin recently investing in Shivalik Small Finance Bank, following investments by Accel and Quona. Other firms like Premji Invest, Multiples, Zerodha, Gaja Capital, and MobiKwik are considering investments in Nainital Bank, a subsidiary of Bank of Baroda.
The rise of neobanks like Jupiter, which partners with Federal Bank to offer modern financial services to Indian customers, signals a shift in the country’s banking landscape. While neobanks have gained traction in markets like Brazil, their adoption in India has been slower.
Despite the potential benefits of these partnerships, there are challenges to overcome, including regulatory hurdles and competition from established players. The success of Jupiter’s acquisition of a stake in SBM India could set a precedent for future collaborations between fintech startups and traditional banks in the Indian market.
In conclusion, the potential acquisition of a stake in SBM Bank India by Jupiter highlights the growing trend of strategic partnerships between fintech startups and traditional banking institutions in India. This partnership could pave the way for further collaborations in the industry, driving innovation and expanding access to financial services for Indian consumers.
