Fintech Startup Vance Raises $5.8 Mn To Facilitate Cross Border Neobanking

Bengaluru-based cross-border neobanking platform Vance has raised $5.8 Mn in a seed round led by Hummingbird Ventures. The round saw participation from Global Founders Capital, Y Combinator, Soma Capital and angel investors Alan Rutledge and Gokul Rajaram. 

The fintech startup plans to use the funds to develop its international banking and go live in the UAE and the UK by December 2022. 

Within the first quarter of 2023, the startup plans to set afoot five more countries and grow its 10-member team to 30 in the next six months, while building products like remittances, savings accounts, and investments.

Founded in 2021 by Stanford dropout Parth Garg, Vance started its journey as a recurring revenue-based financing platform and later pivoted to a cross-border neobanking platform. 

It was a part of the Y Combinator Winter 2022 cohort, brandishing itself as pipe.com for India. Vance would provide upfront non-dilutive capital to startups based on their recurring/subscription revenues.

Later, Garg’s personal experience of cross-border banking difficulties made the startup pivot eight months ago. 

Vance is currently building a banking platform that will allow users to manage separate bank accounts, exchange currencies and eventually invest in equities across markets. 

“Banking and payments have come leaps and bounds over the last decade, but when it comes to international transactions, we still run on archaic systems. It is time to rethink global banking from the ground up,” stated Garg while talking about the need for a ‘global neobank’.

Unlike multi-currency wallets, a Vance account will allow users to transact using local payment systems in the country. That is, a user will be able to use direct debit in the US as well as UPI in India from the same app. The goal is to build a ‘borderless banking account’ and the startup is currently inviting users to the waitlist for the product launch. As of today (3rd Oct), the startup has over 1,000 users on its waitlist.

In India, Vance will compete in the low-penetrated segment with another YC Winter 2022 fintech startup Salt.Pe and YC-backed Zolve. Some of Vance’s features are also comparable to Xflow, Paypal and Transferwise. 

The global neobanking market is slated to grow at a CAGR of 47.7% until 2028, reaching a value of $722.6 Bn. Between 2014 and H1 2022, neobanking startups have raised close to $869 Mn in funding. Some of the key players include Niyo, Open, Freo, and more.