Neobank Stashfin raises $270 million, tops $700 million valuation – TechCrunch

Singapore-based Stashfin has raised $270 million in a new funding round as the neo-bank platform, which currently only serves customers in India, looks set to expand into Southeast Asia and other South Asian markets, it said Tuesday.

The startup has raised $70 million in equity and $200 million in debt as part of its Series C funding round, Stashfin said. Uncorrelated Ventures, Abstract Ventures and Fasanara Capital funded the new round with the participation of existing investors, including Altara Ventures, Tencent, Kravis Investment Partners and Snow Leopard.

The new round values ​​the startup between $700 million and $800 million, Stashfin said. According to Tracxn, Stashfin was valued at about $135 million in the previous round.

Stashfin offers underrepresented segments of society — such as workers, individuals between the ages of 23 and 38 who earn less than $500 a month — credit cards. The startup’s third market segment is armed force.

“We believe that these individuals are underserved because the banks cannot offer them cards or lines of credit due to high operating costs,” said Tushar Aggarwal, founder and CEO of Stashfin, in an interview with TechCrunch.

Stashfin’s dissertation came to Aggarwal when he moved to India over 10 years ago after his stints at Goldman Sachs and General Atlantic.

“When I moved back to India, I had a hard time getting a credit card for almost a year and a half because even though I was Indian, the bank saw me as someone new to credit,” he said. “The experience made me realize that for people growing up in middle-class families, that meant having access to credit in terms of paying tuition or whatever.”

Although nearly a billion Indians have bank accounts, only a small fraction of this population is covered by the country’s fledgling credit rating system. Fewer than 30 million Indians have a credit card today. It is a challenge that extends beyond India.

Startups like Stashfin are starting to serve this audience by using alternative data to build a new-age adoption system.

“It took us almost three and a half years to build the entire tech stack. And that is actually an important USP of a company. We guarantee based on two levels of information: verifying that people requesting the credit line are indeed the ones who will use it, and second, we look at a variety of signals, including mobile data, banking information and other sources to determine the possibility of a person [to be able to pay it back],” he said.

The startup, whose 40 percent of its workforce, including leadership, is represented by women, says it has amassed nearly 10 million registered customers and is currently on track to hit $100 million in annual revenue, a figure expected to be released in the coming years by more than four times will grow from 12 to 18 months. The startup says it releases nearly 100,000 new cards every month.

“The underwriting platform is not only profitable, but also scales with attractive unit economics amid challenging market conditions,” said Salil Deshpande, founder and general partner at Uncorrelated Ventures, in a statement.

“There are many players in the neobanking space, but few share the dedication and ability to serve the underserved and unserved segments that traditional banks and neobanks are ignoring,” he said.

Unlike many other card startups, Stashfin says it hasn’t given rewards to customers. Aggarwal said Stashfin does not serve customers seeking rewards; they’re looking for basic features they can’t get otherwise. “For example, one of the features we have is that our customers can withdraw money from an ATM,” he said. “If you already have a credit card, you’re not someone we’re trying to serve.”

Leave a Comment

Your email address will not be published.