It has been four years since the controversial demonetization move was announced by Indian PM Narendra Modi. That event, apart from its political significance, held a lot of significance for India’s then nascent digital payments industry. The event catapulted digital payments to an altogether different level, both in terms of technology and reach. But despite that and the fact that India now has over a billion debit cards, the credit card industry struggles to grow in the country. A fintech startup however, named ‘Uni’ wants to change that and has taken its first step by raising $18.5 million within two months of its inception.
The funding round of Uni was led by well known VC firms – Lightspeed Ventures India and Accel Partners India. This investment comes as interesting news as Uni is yet to announce its product or service and the investors seem to have placed a bet solely on the credibility of Uni’s well-known founder Nitin Gupta.
Former CEO and co-founder of fintech giant PayU India, Nitin Gupta has also served as the chief executive of Ola Financial Services. He has various successful moves under his belt such as PayU’s acquisition of CitrusPay for $130 million, introducing Ola postpaid among many others. He drove PayU and Ola Financial services to become one of the largest digital payments services in India. In May this year, he stepped down from his position to start his own fintech firm, Uni.
Bejul Somaia, Partner at Lightspeed ventures said, “Nitin and Uni’s team are passionate about unlocking the power of financial services for millions of Indian consumers using new tech-powered solutions. We are excited about their mission and proud to support them from Day One.”
The founding team at Uni also includes Prateek Jindal – who played an important role in setting up Ola Postpaid, and Laxmikant Vyas – who headed the EMI cards business and data science at Bajaj Finance. It is not exactly known yet what their product is but Nitin Gupta has confirmed it is something on the lines of new-age consumer credit cards.
In an interview with TechCrunch, Nitin Gupta said, “It would seem very obvious when it comes out, and people will wonder why nobody else thought of it”. Nitin aims to grow the credit card market in India and has set a target of 200 million credit card users in the country over the next five years. And just to put into context the scale of that ambition, the credit card user base painfully grey to reach a modest 47 million in 2019. By current estimates, the market is anticipated to grow at a CAGR of more than 25% during 2020-2025, on account of rising popularity of credit cards and growing trend of purchasing products first and paying later.
Uni is not the only startup that looks to grow the credit card industry in India. Indian fintech startups such as FreeCharge co-founder Kunal Shah’s Cred and FPL technologies (OneCard) have also raised millions to change the Indian consumer behavior towards credit cards.
