Open Financial Technologies, the Bengaluru neobank that spent its middle years building banking-as-a-service infrastructure alongside its consumer-facing product, has in 2026 completed a strategic narrowing back to its original core: SME banking software sold as a subscription rather than infrastructure rented out to other fintechs. The shift follows the company's 2024 sale of Zwitch, its API banking arm, to payments company Easebuzz, a transaction that surprised parts of the fintech industry given how much engineering effort Open had invested in building that layer. Founded in 2017 by Anish Achuthan, Mabel Chacko, Ajeesh Achuthan and Deena Jacob, Open built a neobank for small businesses and startups on top of partner banks including ICICI Bank, IDFC First Bank and Yes Bank, offering current accounts, payment collection, expense management and reconciliation tools bundled into a single dashboard aimed at time-starved founders and finance teams. The company reached unicorn status in 2022 with backing from Temasek, Google and Tiger Global, at a moment when banking-as-a-service infrastructure looked like the more defensible, higher-margin business relative to the neobank layer sitting on top of it. The competitive landscape has moved in the opposite direction from what that infrastructure bet assumed. RazorpayX has continued expanding its own business-banking suite, large private banks have improved their own digital SME offerings such as ICICI's InstaBIZ, and API banking specialists like Setu and M2P have consolidated much of the BaaS market, making it harder for Open to differentiate a standalone infrastructure product. Selling Zwitch removed a capital- and compliance-intensive business line that was competing against better-funded specialists, freeing Open to concentrate engineering resources on the CFO-facing software stack. The financial logic behind the pivot rests on a familiar SaaS argument: subscription and software-fee revenue, while smaller in absolute terms than the float and interchange income a banking-infrastructure business can theoretically generate at scale, carries higher gross margins, requires less regulatory capital, and is stickier once an SME's finance team has built its reconciliation workflows around a given dashboard. It is a narrower total addressable market than an API banking platform serving other fintechs, but one where Open believes it can achieve profitability faster. What to watch: renewal and expansion revenue from Open's existing SME customer base as the company reports its first full year post-Zwitch sale, whether it raises fresh capital explicitly positioned around the SaaS narrative, and how Easebuzz integrates and scales the Zwitch technology it acquired.
