Fintech firm OneStack has secured Rs 12.5 crore led by Shepherd’s Hill to help cooperative banks integrate directly into the UPI network. This funding will accelerate its expansion into the NBFC sector and enhance its digital banking infrastructure for small lenders.
OneStack, a financial technology infrastructure firm, has raised Rs 12.5 crore in a new funding round. The round was led by Shepherd’s Hill, with existing investors Pentathlon Ventures and AVNM Ventures also participating. This capital takes the startup’s total funding to approximately Rs 45 crore across four rounds, marking a step in its plan to modernise how smaller Indian banks handle digital payments.
Many cooperative banks in India currently rely on older technology and often depend on larger partner banks to manage their digital transactions. OneStack’s platform is designed to bypass these intermediaries. By providing software that allows these cooperative institutions to act as direct UPI issuers and acquirers, OneStack enables them to keep more revenue, specifically from the Merchant Discount Rate (MDR) on digital transactions. This is a significant change for local banks that are looking to hold onto their customer base while offering modern payment services without the need to build expensive proprietary systems.
The new capital will be used to grow its presence across the cooperative banking sector and enter the Non-Banking Financial Company (NBFC) space. The company already provides a range of services, from core banking systems to fraud detection tools, which helps smaller rural and urban lenders meet cybersecurity requirements. Managing these complex systems internally can be too expensive for smaller banks, which is where OneStack’s model aims to offer a cost-effective alternative.
While the company is scaling, it faces the typical challenges of a high-growth startup. Operating in the cooperative banking sector is complex because of its fragmented nature and the heavy dependence on regulatory policies set by the National Payments Corporation of India (NPCI). Additionally, like many early-stage fintech firms, OneStack has reported net losses in the past, including approximately Rs 8 crore in the 2025 financial year. Its long-term stability will depend on its ability to maintain its technology edge, secure further regulatory approvals, and manage costs while competing in a crowded fintech infrastructure market.
For now, the company supports over 200 banks, including state and district central cooperative banks. Its progress will be monitored by how quickly it can onboard more institutions and whether its technology remains compliant with the evolving cybersecurity norms required for financial entities.