Fintech Startup Vegapay Bags $5.5 Mn To Expand Product Offerings

B2B fintech startup Vegapay has raised $5.5 Mn in a seed funding round led by Elevation Capital, along with participation from existing investor Eximius Ventures.

The startup will use the fresh funding to expand its product offerings, particularly on product development and regulatory compliance. 

This investment will further enable the startup to facilitate banks, NBFCs, and other financial institutions in launching and managing products through adaptable credit solutions, the company said in a statement.

Vegapay’s product suite allows financial institutions to offer frictionless, customisable products that meet customer needs and enhance their service offerings.

Further, the capital infusion will enhance Vegapay’s product suite, focusing on development, compliance updates, and hiring top talent for innovation.

“In the credit card space, there are legacy companies, but most of the banks are not liking it for obvious reasons, and therefore new-age players like us are solving the core pain for a bank to offer credit cards or any credit products,” said Gaurav Mittal, cofounder and CEO of Vegapay.

It offers a platform that automates solutions such as card management systems, Unified Payments Interface (UPI) on credit lines, UPI on credit cards, and standalone solutions for credit-based programs like origination systems, loan collection systems, and co-lending management systems.

Founded in  2022 by Mittal, Himanshu Agrawal, Puneet Sharma and Abhinav Garg, Vegapay offers a B2B digital lending and credit card management platform. It aims to create a micro service-driven card and lending issuance stack that would enable issuers to seamlessly integrate and issue lending products that can cater to the unique needs of consumer cohorts.

The company is currently working with over six banks, including a major public sector bank with which Vegapay is launching a credit card next month. Also, it is introducing a credit line on UPI solution with another private sector bank.

In 2023, the firm raised $1.1 Mn in its first institutional funding round led by Eximius.

As per INC42’s report, in Q4 2023, fintech funding in India saw a 12% decline compared to Q4 2022, totaling $413 Mn, alongside the lowest median ticket size in the past three years. Despite this, lending tech sustained investor interest, with fintech SaaS emerging as a strong contender.

The Indian fintech market is projected to soar to $2.1 Tn by 2030, with lending tech emerging as the most lucrative sub-segment.

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