OneStack, a fintech startup that builds banking and payments technology for cooperative banks, has raised Rs 12.5 crore in a funding round from new investor Shepherd’s Hill and existing backers Pentathlon Ventures and AVNM Ventures.
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The startup said the raised capital will fund expansion across cooperative banks and non-banking financial companies (NBFCs), along with product development in payments, core banking and regulatory compliance.
Including this round, OneStack has raised more than Rs 45 crore across four funding rounds. Its other investors include 9Unicorns, growX Ventures, Stride Ventures, Samved VC, Silicon Road Ventures and Venture Catalysts.
The investment from Shepherd’s Hill comes from its maiden private equity fund, launched in 2025. The India-based asset manager has invested in Indian listed equities since 2011, and the new fund is sector-agnostic.
Cooperative banks on UPI under their own names
Alongside the funding, OneStack said cooperative banks using its platform are now live as both UPI issuers and acquirers directly with the National Payments Corporation of India (NPCI), each under its own bank handle.
That means a cooperative bank can issue UPI IDs to its own customers, sign up its own merchants and settle payments on its own rails. The startup said the bank keeps the customer relationship, the transaction data and the merchant discount rate (MDR) and other payment revenue, instead of passing them through a larger intermediary bank.
“Cooperative banks have always had their communities’ trust, but on UPI they were disconnected from their own customers,” said Amit Kapoor, founder and CEO of OneStack.
“That puts the bank, not an intermediary, at the centre of every payment its customers make.”
Kapoor said that with MDR returning to UPI, owning both sides of the payment becomes a revenue opportunity for every cooperative bank.
“With this capital, we will take our payments, core banking and compliance products to more cooperative banks and bring the same capabilities to NBFCs,” he added.
Why MDR matters for small banks
Under the government’s new framework, most person-to-merchant UPI payments above Rs 2,000 will carry a 0.40% MDR, capped at Rs 300 per transaction. Some categories, including bill payments, fuel and education, will attract a flat Rs 5 fee.
The charge was due to start on 15 October. Two days before that, NPCI deferred it until after Diwali, stating that it “shall be implemented immediately post Diwali at a date to be notified separately”.
Its worth noting that the structure of the fee was not changed.
What OneStack does
OneStack was founded in 2019 by Amit Kapoor, with Vishal Gupta joining as co-founder in 2023. Kapoor previously co-founded and led payments company Airpay.
The startup sells technology that lets smaller financial institutions offer digital services without building the infrastructure themselves. Its platform covers mobile banking, UPI issuing and merchant acquiring, QR payments, branded SoundBox devices for merchants, debit card management and its OneCBS core banking system.
It began as a white-label mobile banking provider and later built its own UPI switch and payment service provider stack.
OneStack claims it serves more than 200 banks, including state cooperative banks, district central cooperative banks and non-scheduled urban cooperative banks.
OneStack raised $2 million in a Series A round in March 2025, led by Pentathlon Ventures, with Yatra Angel Network and Venture Catalysts among the co-investors. In February 2026 it raised an undisclosed amount in the same ongoing Series A round, led by Samved VC and Silicon Road Ventures, taking its total funding at the time to about $4.24 million.
“Our decision to back OneStack again reflects our conviction in both the opportunity and the founders’ ability to execute,” said Sandeep Chawda, managing partner at Pentathlon Ventures, a seed-stage B2B tech fund.
Ashutosh Ghanekar, general partner at Shepherd’s Hill, said the firm was excited to partner with Kapoor and the team “as they keep building the digital infrastructure that brings India’s cooperative banks and the millions they serve onto modern financial rails.”
