This fintech issues corporate cards to startups; works with over 1,500 companies annually processing over $100 million in transaction volume
Karbon is a new-age corporate bank built specifically for Indian companies. “We are a startup ourselves and understand the challenges of building and growing a company,” says Pei-fu Hsieh, co-founder and CEO of this fintech startup that issues corporate cards to companies. In less than two years of its official launch, Karbon has worked with over 1,500 companies processing over $100 million in transaction volume yearly. It is growing at 30% month-on-month and has raised $3.5 million till date from Orios VP, Y Combinator and a number of prominent angel investors including Kunal Shah, Jitendra Gupta, Amrish Rau, etc.
“We work with companies as young as two-weeks-old to publicly listed companies,” says the 42 year-old CEO. “In our previous organisations as VCs and entrepreneurs, we realised how convoluted and time consuming the process was to apply for a credit card. We were asked for 110% deposit, a personal guarantee from founders and a huge amount of documentation and time.
That’s when we realised that there was an opportunity to improve the entire process from scratch.” According to him, the problem persists across a lot more banking products that are offered to companies. There is huge scope of improvement in everything from cards to bank accounts, payroll etc. “We want to make this current broken banking experience better for both startups and other companies. The banking experience is broken at the moment for many startups as the banks don’t consider them big enough. These startups are offered less features in the corporate banking product,” he adds.
Basically, Karbon’s card offers four key benefits: First is credit with no personal guarantee or fixed deposits. Karbon provides credit limits up to Rs 10 crore based on company profitability, revenue traction or funding history. Second is control. Karbon enables its customers to issue cards to their teams with one click. It also gives its customers a real-time control over cards issued in their organisation by delivering features like locking/unlocking, credit limit changes, etc.
Third is payout. A lot of budding startups often face difficulties in procuring a decent corporate banking experience. With its payout module, Karbon helps its customers to make seamless NEFT/RTGS/IMPS transaction through their own Karbon Card.
The fourth benefit is rewards. “We offer rewards that are specific to startups’ requirements such as AWS credits ($5000), Uber, and many other SaaS products (Hubspot, Segment, Freshworks, etc. In addition, we offer a WhatsApp-based expense management tool that enables a member to upload the receipt of their spends simply by replying back to the message with an image,” he adds.
However despite all these advantages, the biggest challenge is in convincing startups that such a product actually existed. “For the longest time, startups have been the Davids fighting against Goliaths in all fields. Most services cater to the large enterprises with ability to pay. Never before has a product been built for startups that is entirely free of charge,” says Hsieh.
Karbon makes money from the MDR (that is, interchange income) that merchants pay when the card is swiped. “Therefore, we don’t need to charge our startup customers a dime. The corporate card market runs on interchange which is a cut ranging from 1-2% of the transaction size which is paid by the end merchant. That is, the merchant accepts the card as a payment method,” he informs.
Karbon aspires to become the singular financial platform that companies can use to run their entire business. “We have enjoyed great success as far as corporate cards are concerned but now want to expand our offering to include vendor payments, current accounts and remittances in the near term future to enable companies to have the same seamless and frictionless experience that they enjoy on the Karbon card today,” he adds.