RBI's UPI co-branding ban killed Akudo, the YC-backed neobank for Indian teens

A teen-focused neobank in India issuing debit cards that parents could control, built on partner PPI and UPI infrastructure.

Indian teenagers would make a parent-controlled debit card and UPI app their first bank account

$4.2 million (announced September 2021).

Founded by Lavika Aggarwal, Sajal Khanna and Jagveer Gandhi and backed by Y Combinator, Akudo issued teens debit cards with parental controls, running its UPI and card rails through PPI issuer LivQuik and infrastructure partner M2P Fintech.

Over 70 percent of Akudo's business was UPI and about a quarter was cards. In June 2023 the RBI directed PPI issuers to stop UPI in co-branding arrangements, forcing Akudo, Dream11's Dreamx, FamPay, Muvin and CheqUPI to discontinue UPI because none held a PPI license. Akudo stopped onboarding users, notified LivQuik and M2P of the shutdown, and its attempts to raise new capital did not materialize.

Shutting down: sources told Entrackr the company would likely wind up operations completely within weeks; co-founder queries went unanswered.

Concentration killed it: losing the co-branded UPI rail removed over 70 percent of the business in one directive.

The company never held its own PPI license, so it could only comply while licensed partners pulled the service.

With the core product gone and the teen neobanking space still 'nascent', investors did not fund a rebuild.

A fintech built on someone else's license rents its right to exist; when the regulator changes the rule, the partners comply and the startup dies.

Peers showed the space's fragility: FamPay, the best-funded player at about $43 million, kept operating but struggled to acquire users and new investment, while CheqUPI also survived. Akudo itself was winding down as of September 22, 2023.