When Prashanth Ranganathan stepped down as CEO of fintech company PayU in 2023, he had a clear mission: to help Indian parents finance their children’s dreams of studying abroad. With this vision, the 45-year-old tech expert launched his new venture, Zinc Money, which blends wealth technology and artificial intelligence.

“2. and every parent, every business person, every wage earner I meet at tier 3 already feels like they are hindering their children by keeping them in a small town. There’s a lot of ambition in these places. “That’s what I’m building for,” said Ranganathan, who founded Zinc Money in 2024.

This isn’t the first time the entrepreneurial bug has bitten him. This journey began in 2006 when he joined Dinesh Katiyar, Nikhyl Singhal and Ujjwal Singh to found a voice messaging startup called SayNow. He soon decided to go it alone and founded his first independent venture, Truvie Security, a fraud detection platform.

While Ranganathan’s former teammates at SayNow sold the company to Google, he sold Truvie to online payment giant PayPal, taking a leadership role in the fintech company’s software ecosystem.

“As an entrepreneur, most of us like to be our own martyr. “The most important thing is knowing when to get into a job and when to get out,” Ranganathan said. Mint.

Following its success in the acquisition of PayPal-Truvie, it began working with PaySense again in 2015. Third time was the charm, too, as digital payments company PayU acquired a controlling stake in Ranganathan’s consumer credit startup at a sky-high valuation of $185 million.

Nexus Venture Partners, one of PaySense’s early backers, made a big splash as part of the PayU deal. Nexus had invested $2.3 million in PaySense in a seed round in early 2015 and also poured more money into the startup in two different funding rounds in 2017 and 2018.

The venture capital firm is now investing in Ranganathan again.

Nexus has a $25.5 million lead in Zinc Money’s seed round, with participation from Quona Capital, EDBI, Global Ventures and Saison Capital, the company announced Oct. 28.

This also amounts to one of the largest seed funding rounds for Indian startups in 2024; Others like Centricity, Kratos Studio, and Netmagic follow with $20 million each in seed funding.

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playbook

Ranganathan believes there is more to his journey than just luck. It was crucial to accurately measure the value and impact of a startup idea.

“There are a lot of successful fintech companies in India, but they are often overcapitalized or overvalued. Even if they wanted to exit, they would probably struggle,” he said. Ranganathan added that although many fintech companies have built healthy businesses, they have raised large amounts of funding at high valuations, making it difficult for them to exit during the current funding crisis.

His comments come amid a decline in startup valuations that peaked during the 2021 funding boom, giving rise to many multibillion-dollar companies. This was followed by a funding winter in which tech investors globally reduced their exposure to high-growth startups and shifted focus to profitable businesses. Many loss-making and once-valuable startups have struggled to raise funds since 2022.

“While they have a large war chest, they do not have a defensible business and are nearly impossible to acquire, leaving an IPO as the only real exit option,” he said.

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What’s on the cards

Ranganathan, who may have found gold for the third time, said Zinc Money is built on the intersection of wealth technology and artificial intelligence, two sectors that sound good to investors in 2024.

Sumir Verma, co-founder and managing director of investment banking firm Merisis Advisors, said: Mint It is stated that within fintech, weartech is the only segment currently receiving significant investment interest and with more deals on the way. “Innovation is primarily focused on asset management, with not much activity in consumer lending,” he added. According to Verma, asset management is benefiting from strong market headwinds with rising wealth in India.

Consumer lending, which is the focus area for most fintech companies in India as they try to turn a profit, is not a hot topic at the moment as merger and acquisition activity in the segment remains muted. “When the regulatory environment is uncertain, firms tend to hold off on making significant moves,” he added.

As an entrepreneur, most of us like to be our own martyr. The most important thing is to know when to get into a job and when to get out.

Globally, in the third quarter of 2024, venture capitalists invested $3.9 billion in productive AI startups across 206 deals, according to PitchBook. Meanwhile, tech-rich startups have become the darlings of Indian fintech investors, with companies like Niyo, Centricity and Dezerv, among others, receiving funding last year.

There’s a third segment, education technology, that has seen its share of troubles in the past year.

Zinc Money will assist families with investment and financial planning specifically designed to offset the rising costs of studying abroad. Zinc will also help students provide education consultancy abroad with Ada, an artificial intelligence-supported education consultant. The company also plans to add credit offerings to its suite of services as it progresses.

Interestingly, Ranganathan said that while testing Zinc’s offerings, it wants to eventually build all the offerings in-house, while partnering with brokers, banks and NBFCs.

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From brokerage to foreign remittance services to lending platform, Zinc has it all. Zinc, in its statement, said it aims to be a full-service cross-border financial services platform for Indian families, offering a range of solutions that address the financial complexities of global education.

The company has received approval for RIA (Registered Investment Adviser) license and in-principle approval for PSP (Payment Service Provider) from SEBI. Additionally, the company has also applied for a brokerage license from the International Financial Services Centers Authority (IFSCA) in Gift City.

“It’s a long game. It requires a significant amount of capital. But if I want to impact the lives of several billion people, you certainly can’t do it overnight,” Ranganathan said.

What is the end game of Zinc Coin? “…optimization for a few million customers served. Whether that’s directly through us through venture capital, through a partner that can accelerate growth, or through the public markets, I’m open to all three options.”

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