Kolkata: , a fintech infrastructure provider to cooperative banks, has raised ₹12.5 crore in a funding round led by new investor Shepherd’s Hill, with participation from existing investors Pentathlon Ventures and AVNM Ventures. The fresh capital comes as the company enables to connect directly to NPCI’s UPI network as both issuers and acquirers, allowing them to offer under their own bank identities and retain a greater share of the resulting revenue.




The development could mark a shift in how cooperative banks participate in India's digital payments ecosystem. Through OneStack’s technology, partner banks can now issue UPI IDs to customers and onboard merchants under their own bank handles, while retaining control over customer relationships, transaction data and merchant discount rate (MDR) income.




Including the latest round, OneStack has raised more than ₹45 crore across four funding rounds. Its investor base includes Pentathlon Ventures, 9Unicorns, growX Ventures, Stride Ventures, Samved VC, Silicon Road Ventures and Venture Catalysts.




The company plans to deploy the latest funding towards expanding its presence among cooperative banks and NBFCs, besides developing its payments, core banking and regulatory compliance offerings. It is also extending its platform to NBFCs, with customer verification and fraud-reporting tools.




Founded by Amit Kapoor, who previously co-founded payments company Airpay, OneStack has evolved from a white-label mobile banking provider into a full-stack technology platform for financial institutions. Its offerings include mobile banking, UPI issuing and merchant acquiring, QR payments, debit card management, merchant SoundBox and its OneCBS core banking system.




The company has also built a compliance suite integrated with the Indian Cyber Crime Coordination Centre (I4C). It is an Aadhaar OVSE technology service provider, has integrated eKYC Setu, and holds RuPay Debit Card (Issuance) certification and SU3J licences under credit bureaus.




"Cooperative banks have always had their communities' trust, but on UPI they were disconnected from their own customers. Today our partner banks are live as UPI Issuers and Acquirers directly with NPCI, under their own handles. That puts the bank, not an intermediary, at the centre of every payment its customers make. With MDR back on UPI, owning both sides of the payment is now a revenue opportunity for every cooperative bank," Kapoor said.




OneStack has partnered with a large private-sector bank that sponsors more than 250 cooperative banks, giving it access to a sizeable network for rolling out its UPI and wider banking technology. It has also been onboarded as a technology service provider on Sahakar Sarathi, a shared services entity promoted by NABARD, NCDC and rural cooperative banks.




The two partnerships give the company access to both urban and rural cooperative banking institutions. OneStack currently serves more than 200 banks, including state cooperative banks, district central cooperative banks (DCCBs) and non-scheduled urban cooperative banks (NSUCBs).




The business opportunity comes amid a potential revival of bank revenues from UPI transactions. Under the revised payment framework cited by the company, merchant UPI transactions above ₹2,000 attract an MDR of 0.40%, capped at ₹300 per transaction. The revenue is shared among the issuing bank, acquiring bank, payment service providers and NPCI.




The return of MDR on eligible UPI transactions could create a new revenue stream for banks after years of operating payment infrastructure without direct merchant transaction income. Cooperative banks participating directly as both issuers and acquirers stand to benefit from both sides of a merchant transaction — when their customers make payments and when merchants receive them.




India's cooperative banking network offers a substantial market for technology providers. NABARD's 2024-25 annual report records 34 state cooperative banks and 351 district central cooperative banks, together operating nearly 15,900 branches as of March 2025. The urban cooperative banking segment comprises 1,457 banks with assets of ₹7.38 lakh crore, according to RBI data.




For smaller banks, building and maintaining digital banking infrastructure independently can be expensive, particularly as regulatory requirements around cybersecurity, customer onboarding and reporting become more demanding. Shared technology platforms could help them modernise operations without losing their local identity or customer relationships.




Ashutosh Ghanekar, General Partner at Shepherd’s Hill, said the fund was excited to partner with Kapoor and the OneStack team as they build digital infrastructure to bring cooperative banks and the millions of customers they serve onto modern financial rails.




Sandeep Chawda, Managing Partner at Pentathlon Ventures, said the firm's decision to invest again reflected its conviction in the opportunity within India's underserved cooperative banking ecosystem and the founders' ability to execute.