Slice’s Existential Threat — Can Fintech Unicorn’s Shaky Business Model Survive RBI’s PPI Notification?

Slice’s Existential Threat — Can Fintech Unicorn’s Shaky Business Model Survive RBI’s PPI Notification?

SUMMARY

A $1.5 Bn, 6-year-old startup Slice has been taking legacy banks in India heads on by offering collateral-free credit lines

Five years after its inception, Slice makes a u-turn from its core biz model amidst the RBI crackdown

Monetisation, and profitability are nowhere in sight although Slice has raked in $270 Mn till date, signed a INR 90 Cr deal with Mumbai Indians for primary sponsorship for IPL earlier this year

“I turned 28 few weeks back. I want @sliceit_ to become a unicorn before I get to 30”Through multiple pivots, marketing blitz, cash burn to acquire and retain customers, the story of Slice now is one of a struggle for sustainability and a search for profitability. “The interest rates are very high — even above 30%-40%,” one Slice user told us. “The only revenue stream is charging commissions from third-party applications, partnered merchants for each transaction,” Saha said.“When it comes to extending credit lines, it is usually the NBFC from where the credit is sourced. The bank partnerships are leveraged for logistical support, technology, card issuance and more. Credit card challengers are spending resources on customer acquisitions, marketing spends and then absorbing the losses which puts a question on their revenue model,” he told Inc42. “One has to understand that data is sacrosanct. This is an open secret that many internet firms, especially B2C companies, are engaged in selling data to third-party apps, fintech firms and other corporations,” another industry insider said. 

Last year, Slice founder Rajan Bajaj tweeted his dream of seeing his fintech startup enter the unicorn club before he turns 30. Well, Slice got there well before that deadline — by the end of 2021, its valuation surged to the $1 Bn mark — rising 5X in six months as the likes of Tiger Global, Insight Partners poured in $220 Mn. 

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