Fintech startup Uni raises $70 mn Series A funding led by General Catalyst

The firm had raised a $18.5 mn seed round in October 2020, while still in stealth mode and its flagship product, the pay later card, Pay 1/3rd card was launched this June

Fintech startup Uni has raised $70 million in Series A round led by General Catalyst, making this one of the largest Series A rounds in the Indian fintech space. The round also saw participation from Eight Roads Ventures, Elevation Capital, Arbor Ventures, and existing investors Lightspeed and Accel. The funds will be used to scale-up the team, launch new category-creating products and invest further in tech to redefine consumer experience. The valuation of the company after this funding has increased to $350 million from previous valuation of $45 million.

“The Indian credit market is ripe for explosion and there is vast room for innovation,” said Nitin Gupta, founder and CEO of Uni. “We found a strong product-market fit with our very first product, the Pay 1/3rd card--a first of its kind card in the market and haven’t looked back from there.”

Uni was founded by Nitin Gupta, Prateek Jindal and Laxmikant Vyas who previously held leadership positions in large fintech and financial services organizations like PayU, Bajaj Finserv and Ola Financial Services. The founding team came together on the back of considerable experience in products like pay later and credit cards. Uni raised a $18.5 million seed round in October 2020, while still in stealth mode and their flagship product, the pay later card, Pay 1/3rd card was launched in June 2021.

Pay 1/3rd card is one of the fastest-growing pay-later cards in India currently, registering a monthly disbursal of Rs 175 crore within 6 months: a rare feat in the BNPL (buy now, pay later) space, said the company. It is India’s first pay-later card that automatically splits every transaction into 1/3rd allowing consumers to pay their monthly spends in 3 parts over 3 months for no extra charges. It also offers a unique flexibility to the users to get 1 per cent rewards in the form of cashback if they choose to pay back in full after the usual 1-month interest-free credit period. The card intuitively solves for short-term liquidity without consumers being burdened by high-interest rates and fees. The firm said its product has seen massive adoption in the last 6 months and is currently growing at 50 per cent M-o-M (month-on-month). The firm is targeting to achieve Rs 1,500 crore monthly disbursals in the next 12-18 months. Uni is already present in 50 cities and is targeting to add 50 more cities in the next quarter.

“BNPL is growing at a breakneck speed in India and within BNPL we are seeing that the biggest potential lies in the Pay1/3rd category and we are leading this space with our innovative product and customer experience,” said Gupta. “We are delighted to have some of the best investors in the world partnering with us as we gear up for our next phase of growth.”

India has only 130 million ‘credit active’ users and only 38 million of these have a credit card today, signaling a severely underpenetrated credit industry in the country. Today, BNPL players are tapping into this huge whitespace by making access to credit democratic. Consulting firm RedSeer estimates that the BNPL market in India will grow to $45-50 billion by 2026 from the current market size of $3-3.5 billion. The number of BNPL customers is also expected to rise to 80-100 million from the current number of 10-15 million customers. The bourgeoning pay later market provides players like Uni a massive opportunity to innovate, and design varied credit products for different customer segments and improve customer experience by 10x.

Talking about their investment in Uni, Alex Tran, Managing Director at General Catalyst said, “There are few countries in the world where the opportunity for credit expansion is as massive as in India,” said Alex Tran, managing director at General Catalyst. “We believe some iconic companies will be built to capture this opportunity in the next decade. We are excited to back a team that is world-class on credit, risk, and payments while also being hyper focused on product and customer delight."

Shweta Bhatia, partner and head of technology investments India, Eight Roads Ventures said Uni’s offering combines salient features of cards and ‘buy-now-pay-later’ to provide a game-changing consumer experience. “We are impressed with Nitin (Gupta) and his team’s intense product focus and are excited to back them as they execute their bold vision to transform India’s consumer finance landscape with a highly customer-centric, transparent, and frictionless suite of offerings,” said Bhatia.