OneStack Raises Rs 12.5 Crore to Expand Cooperative Banking

By Daniel Okafor

OneStack has raised Rs 12.5 crore from Shepherd's Hill, Pentathlon Ventures and AVNM Ventures. The round will expand the Mumbai-based fintech infrastructure startup's digital banking services for cooperative banks and non-banking financial companies (NBFCs).

The fresh capital will also fund payments, core banking and regulatory compliance products, according to SiliconIndia. The investment lifts OneStack's total fundraising to Rs 45 crore across four funding rounds.

Who backed the latest funding?

According to SiliconIndia, Shepherd's Hill is a new investor in the round. Pentathlon Ventures and AVNM Ventures are existing investors. OneStack previously raised $2 million in a Series A round in March 2025, led by Pentathlon Ventures.

Yatra Angel Network participated in that Series A alongside existing investors 100Unicorns and Venture Catalysts. The return of Pentathlon and AVNM gives the latest round continuity among investors that have backed OneStack's banking infrastructure strategy.

How does OneStack serve smaller banks?

OneStack provides technology infrastructure that lets smaller financial institutions offer digital banking without developing their own systems. Its platform includes mobile banking, UPI issuing and merchant acquiring, QR payments, debit card management and OneCBS, its core banking system.

For a cooperative bank, OneStack acts like a payment switch and core processor combined. The bank can operate as a direct UPI issuer and acquirer with the National Payments Corporation of India (NPCI) under its own bank handles.

This direct setup lets banks issue UPI IDs to customers, onboard merchants and manage payment settlements. They can also retain customer relationships, transaction data and merchant discount rate (MDR) revenue, according to SiliconIndia's report.

The practical result is that smaller institutions can retain customer and merchant payment economics without building a core system or a direct NPCI connection from scratch. OneStack supplies both layers through its platform.

What will NBFC expansion add?

OneStack plans to extend its infrastructure to NBFCs through customer verification and fraud reporting tools. Its regulatory compliance products include integration with the Indian Cyber Crime Coordination Centre (I4C).

OneStack is also an Aadhaar OVSE technology service provider and has integrated eKYC Setu. It holds RuPay debit card issuance certification and SU3J licenses under credit bureaus, SiliconIndia reported.

The planned NBFC products broaden OneStack's customer set beyond cooperative banks. Its compliance stack adds identity verification, fraud reporting and compliance functions to its payments and core banking products.

How will the bank partnership widen reach?

OneStack has partnered with a large private sector bank that sponsors more than 250 cooperative banks. SiliconIndia did not identify the institution. The partnership is expected to provide a distribution channel for OneStack's UPI issuing, merchant acquiring and broader banking infrastructure solutions.

The sponsor relationship could shorten OneStack's route to a wider cooperative-bank network. OneStack says it already serves more than 200 banks across India, including state cooperative banks, district central cooperative banks (DCCBs) and non-scheduled urban cooperative banks (NSUCBs).

How large is the cooperative banking market?

NABARD's 2024-25 annual report counted 34 state cooperative banks and 351 DCCBs in India. Together, those institutions operated nearly 15,900 branches as of March 2025.

SiliconIndia said smaller financial institutions increasingly require technology platforms for digital payments, banking operations and regulatory compliance. The nearly 15,900-branch network gives OneStack a sizeable base for distribution, although its agreement with a bank sponsor matters as much as the branch count.

What will determine the next stage?

The Rs 12.5 crore infusion directs capital toward product expansion, but distribution will decide scale. OneStack's agreement with a sponsor of more than 250 cooperative banks offers a route beyond the more than 200 banks it says it serves.

The commercial test is whether banks keep their UPI customer and merchant economics while adding OneStack's verification, fraud-reporting and compliance tools. If OneStack converts that model across cooperatives and NBFCs, its four-round, Rs 45 crore backing will support a broader role in smaller-finance infrastructure.