Fintech start-up slice turns India's 41st unicorn in 2021, raises $220 mn

Fintech start-up slice has raised $220 million in a Series B round that values the company at over $1 billion, making it the latest entrant to India’s coveted unicorn club.

slice issues prepaid visa cards with a credit line that allows users to get credit card-like benefits as well as build their credit score. It claims to have more than 5 million registered users and a 40 per cent month-on-month growth rate accompanied by industry-leading risk metrics. This year has a huge investor interest in start-ups with fintechs leading the way.

The funding round was led by high-profile investors Tiger Global and New York-based global private equity and venture capital Insight Partners. New and existing investors include Advent International’s Sunley House Capital, Moore Strategic Ventures, Anfa, Gunosy, Blume Ventures, and 8i. Angel investors who took part in the round are Binny Bansal, co-founder of Flipkart, and Guillaume Pousaz, a Swiss entrepreneur and CEO and founder of payment platform Checkout.com.

The start-up plans to use the funding to strengthen its presence in the payments space, hire great talent, and expand its product offerings. “We have been building very strong foundations. Some of those things are now coming into place. We are growing fast and we will continue doing that. We'll use the funds to add new product lines, hire more great engineers, product managers and designers,” Rajan Bajaj, founder and chief executive officer of slice, said in an interview.

Even as most individuals in India have bank accounts and debit cards, only a sliver of this banking population has access to credit cards, which is less than 35 million according to industry estimates. Moreover, the nation’s young credit-rating system covers only a tiny fraction of this population, making it tediously challenging for them to own a credit card.

“We are going after those customers who value their time a lot. They get irritated by gotchas, the hidden processes and long tedious paperwork,” said Bajaj. “The average age of our customer is 27 and this is the fastest-growing population in India. They want far superior experience in payments and credit which is what we are building.” The company claims it has made it easier for users to pay their bills by letting them divide the bill into three months instalments at zero cost. Users get a virtual card (and get a physical card delivered to their home), and get up to 2 per cent cashback on each transaction. “slice has built a product that customers love, which we expect will result in continued growth and market share gains,” said Alex Cook, partner at Tiger Global.  

slice, which ships over 200,000 cards each month, has opened doors to the new- to-credit population. They can start their financial journey with the newly introduced card with a limit of Rs 2,000. “There is a large opportunity in the credit and payment space in India, and slice is well-positioned to become the leader in the industry,” said Deven Parekh, managing director at Insight Partners.

The funding would also help the firm to launch a product related to unified payments interface (UPI)-based payments. “We're going to launch UPI that will have very high usability,” said Bajaj. 

The firm competes with players such as ZestMoney, LazyPay, KreditBee, and others.