Startup funding: Fintech startup Kiwi, which allows users to make UPI payments from its virtual credit card, has raised $13 million in its Series-A funding round led by Omidyar Network India. The startup’s existing investors Nexus Venture Partners and Stellaris Venture Partners also participated in the round.
Launched by Siddharth Mehta (ex-CEO, Freecharge), Mohit Bedi (ex-Axis Bank and PayU), and Anup Agrawal (ex-business head, LazyPay), Kiwi said it is the first fintech company in India to launch a virtual credit card with UPI by issuing digital RuPay Cards in collaboration with Axis Bank.
The startup allows payments using either a credit card or a bank account directly through phones. Kiwi is certified by the NPCI (National Payments Corporation of India) as a licensed UPI third-party app. The startup said it has issued 25,000 credit cards and aims to on-board 5 lakh customers by the end of 2024 along with two more banks in the next six months.
“We started a few months back and looking at the positive response we have received in the last six months of our existence, this fresh round of financing comes at a critical juncture in our business. The funds will enable us to further develop our services and offer innovative products to our customers as we enter the next phase of product development and growth,” said Anup Agrawal, Co-founder and CEO, Kiwi.
According to the startup, leveraging credit as a key attraction will drive customer acquisition, particularly with the vast user base of nearly 300 million UPI users, out of which only 40 million are deemed credit-worthy by banks based on traditional underwriting criteria.
“The number of unique UPI users is 8-10 times the number of existing credit card users in India, and the acceptance points for ‘Credit on UPI’ are estimated to be 35X larger than regular credit card acceptance points. This presents significant growth potential for Kiwi,” it said.
Treasa Mathew, Director, Omidyar Network India said, “Increasing access to affordable and convenient financial products beyond digital payments and ensuring deeper and more consistent usage of formal credit is the critical next step in advancing the financial inclusion journey of India’s Next Half Billion.
According to the data from the Reserve Bank of India (RBI), credit card spending dipped 4.2 per cent in September to Rs 1.42 trillion from Rs 1.48 trillion in August. While IndusInd Bank reported 10.9 per cent growth, others such as State Bank of India, Axis Bank, ICICI Bank, and HDFC Bank saw 8.9 per cent, 8.4 per cent, 4.9 per cent, and 1.8 per cent decline respectively.