Fintech startup slice, which offers payments cards and credit cards to millennial and Generation Z audiences, has raised $20 Mn in a fresh equity funding round led by existing investors Blume Ventures and Gunosy Capital, as it seeks to double down on its growth in the coming months.
The company had previously raised up to $53.7 Mn according to Crunchbase including an INR 46 Cr Series B round from Gunosy Capital in 2020. Blume Ventures had invested in its 2016 seed round.
Founded in 2016 by Rajan Bajaj, slice (earlier Slicepay) is a fintech startup offering credit solutions exclusively for young consumers between the ages of 18 and 29. The company issues credit cards and payments cards to this segment in partnership with Visa and SBM Bank, allowing this cohort to build a good credit score, while also offering rewards and discounts from payments. It provides Generation Z and millennial audiences a credit line starting from INR 10,000 going up to INR 10 Lakh.
CEO and founder Bajaj said that the banking industry in India has always viewed credit cards as a loan product rather than a high frequency payment instrument. Therefore, the main focus of banks is to optimise the fees related to credit cards and there are portfolio teams to increase the loan book. This leaves the customer experience in the corner.
The slice card is also accepted at offline payment points, through its partnership with Visa. At present, slice has a payment acceptance network of 5.5 Mn merchants, with 95% of its merchant partners based offline, claims the company. It also offers users no-cost EMI products for online merchants including Flipkart.
“We see it as a payment product, and we are solving it as a consumer experience problem with a ‘customer first approach’ in mind. This approach gives us a strong word of mouth among our customers due to their love for slice. It has directly resulted in our customer acquisition cost being 10 times lower than banks, which becomes a great competitive advantage. We are therefore able to pass on the benefits to our users via these game-changing offerings,” said the CEO.
The company claims it has over 3 Mn registered users and is growing consistently at 25% month-on-month. Along with the fundraise, the company has also announced the launch of new features on the platform including ‘slice rewards’ and ‘slice in 3’. Through ‘slice rewards’ members can get upto 2% rewards on every card transaction, which are instantly redeemable in cash. Finally, ‘slice in 3’ allows users to split their card bills into instant equated monthly installments (EMIs) payable across three months.
The company now plans to roll out rewards for unified payments interface (UPI)-related transactions for its customers, in the coming months. It claims to have issued cards to 20,000 users this month and is on track to ramp up its monthly issuance to 50,000 users by September this year. It is targeting $1 Bn in annualised transaction payment value by FY22.
“slice’s biggest advantage is how well they understand millennials and Gen Z. Their approach to solving their issues has been truly refreshing and building something simple and hassle-free has been a part of their DNA since inception. The slice super card has the potential to fundamentally change the way the next generation thinks about the concept of credit cards,” said Shinji Kimura, chairman and CEO, Gunosy Inc.
Earlier in the month, FamPay, a fintech startup targeted towards teenagers announced the fundraise of $38 Mn Series A, led by Elevation Capital and major participation from existing investor Sequoia Capital India. Other neobanking companies that targeted younger customers include Junio, Yodaa and Fi Money (salaried individuals).