Singapore-based Stashfin has raised $270 million in a new funding round as the neobanking platform, which currently only serves customers in India, looks to expand to Southeast Asia and other South Asian markets, it said Tuesday.
The startup has raised $70 million against equity and $200 million as debt as part of its Series C funding round, Stashfin said. Uncorrelated Ventures, Abstract Ventures and Fasanara Capital financed the new round with participation from existing investors including Altara Ventures, Kravis Investment Partners and Snow Leopard.
The new round values the startup between $700 million to $800 million valuation, Stashfin said. Stashfin was valued at about $135 million in its previous round, according to Tracxn.
Stashfin provides under-represented parts of the society – such as blue collared workers, individuals aged between 23 to 38 making less than $500 a month – credit line cards. The startup’s third market segment is armed force.
“We believe these individuals are underserved because the banks cannot offer them cards or credit lines because of high operational costs,” said Tushar Aggarwal, founder and chief executive of Stashfin, in an interview with TechCrunch.
The thesis of Stashfin 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 pretty hard time getting a credit card for almost a year and a half because although 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, what access to credit meant in terms of paying for tuition classes or whatnot.”
Even as nearly a billion Indians have bank accounts, only a sliver of this population is covered by the country’s young credit rating system. Fewer than 30 million Indians have a credit card today. It’s a challenge that extends beyond India.
Startups like Stashfin are beginning to serve this audience by using alternative data to build a new-age underwriting system.
“It took us almost about three and a half years to build the whole tech stack. And that’s actually a key USP of a business. We underwrite based on two degrees of information – verifying people who are applying for the credit line are indeed those who will be using it, and second, we look through a variety of signals including mobile data, banking data and other sources to determine the capability of a person’s to payback,” he said.
The startup, whose 40% staff including leadership is represented by women, says it has amassed nearly 10 million registered customers and is currently on the trajectory of hitting $100 million in annualized revenue, a figure it projects would grow by over four times over the next 12 to 18 months. The startup says it is issuing close to 100,000 new cards each month.
“The underwriting platform is not only profitable, but 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 commitment and ability to serve the underserved and unserved segments that traditional banks and neobanks ignore,” he said.
Unlike many other startups in the cards space, Stashfin says it has avoided giving rewards to customers. Aggarwal said Stashfin is not serving customers who are looking for rewards, they are looking for basic features that they can’t get otherwise. “One of the features we have, for instance, is that our customers can take out money from an ATM machine,” he said. “If you already have a credit card, you are not someone we are trying to serve.”