Neobank Fi Money shuts down banking services

Peak XV Partners and Alpha Wave Capital-backed neobanking startup Fi Money on Wednesday informed its customers that it is shutting down its banking services, which it was offering in partnership with Federal Bank. The company catered to over 3.5 million customers through its platform and had raised $168 million in equity funding.

In an email to its customers, the neobank wrote that the banking services on the Fi app will soon be discontinued. “However, your savings account with Federal Bank remains active and fully operational. Your funds remain completely safe and accessible at all times,” the message, which was accessed by ET, read.

Kerala-headquartered Federal Bank also emailed customers saying its partnership with Fi is ending as part of a business realignment. Customers can continue operating their savings accounts directly through Federal Bank’s official channels, including the FedMobile app.


“As part of business realignment strategies, we want to let you know that our partnership with Fi is ending. Your account remains the same, and only the channel through which it is accessed is changing,” an official email from Federal Bank read.

Founded in 2019 by former Google Pay executives Sujith Narayanan and Sumit Gwalani, Fi Money has raised $169 million over multiple rounds, as per Tracxn data.

In recent weeks, some customers reported difficulty reaching Fi’s customer support and said they had to rely on email communication for official updates and query resolution.

Earlier in February, the fintech's founder had said it was restructuring its business and moving away from some of its consumer-facing products to focus on artificial intelligence (AI) and enterprise technology. Many employees from these consumer-facing verticals were laid off in the past year.

“As we realign, some products will be sunset, and thus a few roles are being impacted. This is not about effort or talent. It’s about how the company needs to be structured going forward,” Narayanan, cofounder of the company, had written in a LinkedIn post.

He added that Fi will continue its work on deep technology and the intersection of AI and business-to-business (B2B).

The neobanking sector has been passing through a tough phase, with companies including Jupiter, Open, and Niyo, which do not have independent banking licences, being forced to partner with traditional banks, which limits their operational autonomy and product innovation.