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YES Bank has tied up with Venture Catalysts Group Funds, to invest in some of its portfolio companies. Venture Catalyst Group Funds is an integrated incubator that offers funding, mentorship and a network to startup founders from the idea inception stage to the growth stages of the startup journey.
“YES Bank has partnered with the overall Group to invest in the individual platforms that are sponsored by the Group--Beams Fintech Fund and and 9 Unicorns Accelerator Fund,” said Sagar Aggarwal, Co-Founder of Beams Fintech Fund.
The private sector lender has presently invested in the Funds and will be individually working with specific companies, Aggarwal told BusinessLine.
“We’ve done a lot of work together already. There will be a significant amount of companies they will be working with closely,” he said, adding that the bank has been working with them for almost 1.5 years now.
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Beams Fintech Fund invests in growth stage companies operating in the financial technology space, whereas 9 Unicorns Accelerator Fund is an early stage sector agnostic investor.
Technological investments
YES Bank said the partnership aligns with the long-term growth strategy of strengthening its foothold in India’s growing tech market.
“Collaborating with and supporting tech companies to ideate and experiment on various use cases such as agriculture, healthcare, commerce, education, logistics, open banking, supply chain finance, payments, digital banking, among others has been a key driver of YES Bank’s innovation strategy,” it said in a release.
The portfolio companies will work closely with YES Bank on multiple fronts across areas such as technological integration, business banking, service provision, co-creation of products and lending, according to Aggarwal.
The two Funds together have over 120 portfolio companies, of which around 30 are fintech companies.
Beams Fintech Fund
Beams Fintech Fund, a category II AIF (alternative investment fund) was launched at the start of 2022, and has a target to deploy $ 180 million across 10-12 investments over the next three years in Series B and C rounds of fund raising by companies.
The partnership with YES Bank will allow Beams Fintech Fund to create value for its portfolio companies, which will encourage more banks and NBFCs to invest in the Fund, Aggarwal said.
“Fintech as a space is a secured space in India, with the first wave of payments and lending companies having received capital. Now, over the net 5-7 years we see capital flowing across sectors,” he said.
He added that he expects fintechs as infrastructure, commerce and finance, vertical and sector-focused payments, neo and digital banking, and niche wealth-tech solutions and product companies to be key growth segments.
Saying that the Fund is exploring these categories with a 3-5-year investment horizon, Aggarwal added that the aim is to partner with at least 5-7 banks and NBFCs each and 3-5 fintech companies.
“10-12 institutions we would love to bring as investors into the Fund and then partner with them through the companies,” he said.
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