Karbon Card Raises $15 Mn; Plans Transition Into Neobank By CY22

SUMMARY

Led by Olive Tree Capital, Harmony and Avenir Growth Capital, existing investors Ramp, Mercury and Orios Venture Partners participated in the round

The expense management also offers unsecured loans of up to INR 5 Cr to employees and credits for personalised SaaS requirements

Now, it plans to transition into a neobank, offering services from saving accounts to credits — with the added benefit of being asset-light

Y Combinator-backed corporate expense management platform Karbon Card has raised $15 Mn in a Series A round led by Olive Tree Capital, Harmony and Avenir Growth Capital. The fundraise also saw participation from existing investors Ramp, Mercury and Orios Venture Partners.

The current round follows Karbon’s $12 Mn Pre-Series A round in September 2021, taking the startup’s total fundraise to $32 Mn.

The Bengaluru-based startup plans to use the funds raised to upgrade products, onboard more talents and scale operations. Karbon also plans to transition into ‘India’s first corporate neobank’ by CY21.

In a statement, the startup said, “While the core benefit remains to provide quicker and hassle-free credit card access for corporate spends, there is a growing demand for secured products and services. Hence, the transition to neobank becomes a natural progression.”

A neobank generally offers all banking services — from saving accounts to credits — with the added benefit of being asset-light, i.e not having any physical branches.

Founded in 2019 by Pei-fu Hsieh, Amit Jangir, Kartik Jain and Sunil Sinha, Karbon Card offers corporate cards to small businesses, enterprises, corporates and startups. It offers varied expense management features such as petty cash management, expense report automation, prepaid cards for business expenses, travel expense management, among others.

The startup claims to serve over 2,000 corporates such as PharmEasy, ixigo, Jupiter, among others. It enables not only expense management but also offers unsecured loans of up to INR 5 Cr to employees, personalised requirements such as $50K worth AWS credits or other SaaS credits.

As claimed by Karbon, the fintech startup had a monthly GTV (gross transaction value) of $30 Mn in December 2021, and it expects to grow it to $200 Mn in 2022 as credit demand picks up pace.

Karbon makes money from interchange fees and aims to solve a major problem for small businesses and startups by replacing the use of personal credit cards for company usage with corporate cards.

The startup competes with the likes of Happay and Kodo. Kodo, another Y Combinator-backed startup, previously raised $8.75 Mn in a seed funding round, in May 2021.