Novatti has also purchased a $2m equity stake in its banking subsidiary. Credit: Nattanan Kanchanaprat from Pixabay.

Fintech startup Novatti, which provides payment solutions for businesses, has closed a $10.5m Series A funding round to support its banking subsidiary, Novatti B Holding Company (NBHC).

The new capital will be leveraged by NBHC to develop a new banking business after obtaining a restricted banking licence from the Australian banking regulator.

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The company is expected to secure regulatory approval for the venture before the end of February 2022.

In connection with the funding round, Novatti has purchased an equity stake in NHBC from BC Growth Investments (BC Invest) for $2m in cash.

The company currently holds 70% of NHBC.

The deal was first announced to ASX as part of the seed funding round into NBHC in May this year.

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Novatti managing director Peter Cook said: “Completing the Series A funding round for our new banking business enables us to plan for the growth of this business post regulatory approval.

“This is important as we want to hit the ground running to ensure we capture the strong momentum we are seeing from consumers and investors backing fintechs that can provide new and innovative banking services.”

Cook also remarked that the new banking business will help Novatti to offer ‘new, value-added services to its customers while driving increased margins.

NHBC CEO Guy Carvalho said: “This Series A funding enables us to operate under a restricted banking licence while also working towards our longer term goal of securing a full banking licence.”

The latest funding round follows Novatti’s over $40m capital raise to boost its growth strategy.

The firm recently expanded its partnership with Ripple to drive remittance in Thailand.

It also acquired a 19.9% strategic stake in the accounting software platform, Reckon.