Knight Fintech, a banking infrastructure and lending solutions provider, is in the final stages of closing a $25 million funding round led by Accel. First reported by ET, citing three sources, the funding round is expected to include a secondary portion, in which initial investors may exit.

As per the sources, the round is expected to witness participation from existing backers 3one4 Capital and Prime Venture Partners, with the final contours of the deal still being worked out.

Knight FinTech | AI-enabled Digital Transformation in Finance

Founded by Kushal Rastogi, who had previously worked in the asset management industry and founded QuantMagnum Technologies, along with co-founder Parthesh Shah, Knight Fintech is a banking infrastructure and lending solutions provider that offers full-stack banking tech solutions in the domain of co-lending, lending, and treasury.

The startup helps financial institutions across key functions such as decision support, cash, and asset-liability management.

The startup offers four distinct product lines to banks and fintechs- lending management system Knight Utopia, bank-treasury management system Knight Beacon, liquidity and working capital management (corporate-treasury) suite Knight Ascent, and analytics and credit rating system Knight Quest.

Rise of Financial and Banking-tech Software Providers

The investment in Knight Fintech highlights the growing trend around VCs looking to back financial and banking-tech software providers. Last month, DPDzero, a fintech startup that helps lenders scale their collections via its repayments stack, secured $3.25 million (Rs 27.05 crore) in a seed funding round for product development, distribution, and hiring talent.

The funding round was co-led by Blume Ventures and IndiaQuotient, where angel investors Sunil Gulati and Nikhil Kumar also participated.

The same month, Roopya, a SaaS-based lending infrastructure platform that powers NBFCs / Banks / Fintechs to start loan origination and underwriting in less than 5 minutes, secured $611,828 in a pre-seed round of funding to develop its technological infrastructure. In September, Perfios, a B2B SaaS fintech startup, raised $229 million in a Series D funding round for fuelling its continued global expansion plans in North America and Europe.

Emtech Solutions, a startup helping in the regulatory review process of fintechs, raised $4 million (Rs 33.13 crore) in a funding round to fuel the development of its infrastructure tools for central banks and fintech companies.

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