Credit Card Infra Startup Hyperface Bags $9 Mn From 3one4 Capital, Others

Bengaluru-based Hyperface, a credit card-as-a-service startup, has announced the close of its $9 Mn seed fund. Led by 3one4Capital, the round saw participation from existing investors Global Founders Capital and Better Capital. Flipkart Ventures, Groww and Rebalance Angel Community are the new investors to the startup’s captable.

The credit card infrastructure provider plans to use the funds to strengthen its credit embedding feature and build a strong team. From an 18-member team in October 2021, the startup has grown to employ over 30 people currently. It plans to double down on the team and also use the money for product innovation and business development.

This round also takes Hyperface’s total funding to $10.7 Mn across two rounds.

Founded in 2021 by second-time entrepreneur Ramanathan RV and banking veteran Aishwarya Jaishankar, Hyperface is a Stripe-style platform that enables a simplified but end-to-end payment system that ensures fast implementation and hassle-free operations of credit cards and pay later services on any digital platform.

It offers a full-fledged BNPL (buy now, pay later) service and several add-on features such as consumer KYC services, rewards and loyalty programme management and payment reminders.

Credit cards are increasingly becoming the choicest payment modes for digital payments after UPI. Despite having one of the lowest penetration rates (at 5.55%) in India, 76% of all credit card payments in May 2022 happened on ecommerce platforms, an RBI report stated.

However, the launch of a credit card programme takes somewhere between 12 to 18 months for businesses. Hyperface, with its end-to-end application programming interface (API) integrations, aims to reduce this time by about 10 times.

The fundraise comes at a time when the credit industry is facing heat from RBI over allowing users to load credit lines into prepaid payment instruments (PPIs) like prepaid cards and wallets. 

Banks are increasingly offering discounts, cashback and add-on services on cobranded cards by partnering with ecommerce giants. For example, Amazon partnered with ICICI Bank & HDFC Bank, Flipkart with Axis Bank, and Snapdeal partnered with Bank Of Baroda.

Thus, the market is ripe for innovation and the Kunal Shah and Binny Bansal-backed B2B startup is already creating ripples with its AU LIT card – a customisable credit card in partnership with AU Bank. 

In the credit card industry, which is growing at a CAGR of 20%, Hyperface competes with the likes of fintech SaaS M2P, Razorpay’s TERA Finlabs, and Mastercard-backed Zeta, among others.

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