OneStack, a fintech infrastructure provider focused on cooperative banks, has raised ₹12.5 crore in a funding round led by new investor Shepherd’s Hill, with participation from existing backers Pentathlon Ventures and AVNM Ventures. The company plans to use the capital to expand its technology and services for regional banking institutions seeking a stronger presence in India’s digital payments ecosystem.
The funding was reported on November 4 and comes as smaller banks look to increase their participation in the Unified Payments Interface (UPI), one of India’s most widely used digital payment systems.
Helping Cooperative Banks Connect Directly to UPI
OneStack provides technology that allows cooperative banks to connect with the National Payments Corporation of India’s UPI network. Through its infrastructure, partner banks can participate as both issuers and acquirers, enabling them to offer digital payment services under their own identities.
This model can help cooperative banks maintain a closer relationship with customers and merchants instead of depending entirely on third-party payment platforms. It may also allow participating institutions to retain a larger share of the revenue generated through digital transactions.
For smaller banks, building and maintaining the technical infrastructure required for digital payments can be expensive and operationally complex. A specialist technology provider can help reduce that burden by offering connectivity and related services.
Funding to Support Wider Banking Adoption
The ₹12.5 crore investment is expected to support OneStack’s efforts to deepen its presence among cooperative banks and expand its fintech infrastructure offerings. The company also serves NBFCs and is developing compliance-related services for financial institutions.
The funding round reflects investor interest in the technology layer supporting India’s digital financial system. While consumer-facing payment applications receive much of the public attention, the underlying infrastructure used by banks, payment providers and financial institutions remains an important part of the ecosystem.
Regional Institutions Face a Digital Transition
Cooperative banks play a significant role in serving local communities, small businesses and customers who may have limited access to larger banking networks. Their ability to offer modern digital payment services can influence how effectively they compete with commercial banks and fintech platforms.
However, expanding UPI participation also requires strong fraud monitoring, reliable transaction processing, customer support and regulatory compliance. Technology providers serving these institutions will need to demonstrate that their systems can meet the operational standards expected of India’s payment infrastructure.
OneStack’s latest funding gives it additional resources to pursue this opportunity as cooperative banks continue to modernise their digital services.
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