Teen-Focused Digital Bank Akudo Faces Shutdown

September 24, 2023

The decision comes in response to a Reserve Bank of India (RBI) directive that prohibited the use of the Unified Payments Interface (UPI) in a co-branding arrangement…reports Asian Lite News

Leading US-based investment firm Y Combinator-backed Akudo, a teenagers-focused neo-banking platform, is shutting down its core UPI and card business, media report said.

According to Entrackr, citing sources, the decision comes in response to a Reserve Bank of India (RBI) directive that prohibited the use of the Unified Payments Interface (UPI) in a co-branding arrangement.

“Akudo is likely to wind up its operations and shut down completely in a few weeks from now,” a person familiar with the matter was quoted as saying.

“The company has already stopped onboarding new users and intimated its PPI issuer LivQuik and infra partner M2P Fintech about the shutdown,” it added.

According to the report, UPI accounts for the majority of Akudo’s business (over 70 per cent), with cards accounting for approximately 25 per cent of total revenue. Aside from regulatory issues, the company is also out of cash, and its attempts to raise new capital have failed.

Akudo, founded by Lavika Aggarwal, Khanna, and Jagveer Gandhi, is a digital bank for teenagers that offers debit cards that can be controlled by parents. 

The firm raised $4.2 million led by Y Combinator, JAFCO Asia, Incubate Fund India and AET Fund. Tribe Capital, Cabra Capital, and a few other investors also took part in the round, which was announced in September 2021. 

The RBI has directed PPI issuers to halt UPI in co-branding arrangements. Because of this move, companies like Dream11, Fampay, Akudo, Muvin and CheqUPI had to discontinue UPI services as they didn’t hold PPI license.

ALSO READ: Natural Gas Set To Reshape Africa’s Economic Landscape

Previous Story

India Aims to Become Semiconductor Hub

Next Story

India’s Chemical Exports Spotlighted at Industry Connect Meet

Latest from BUSINESS

India’s Job Market Surges

With hiring levels on the rise, compensation is expected to increase by 12-15% in metro cities and by 18-22% in emerging cities

India Inc Eyes Upswing

Private equity (PE) remained comparatively stable in Q2, clocking 357 deals worth $7.4 billion — the second-highest volume since Q4 2022. However,

Microsoft Cuts Deep

The fresh job cuts come less than two months after Microsoft announced it was laying off more than 6,000 employees…reports Asian Lite