India-based digital credit card operator Uni has secured $70m in series A funding from investors including financial services and investment firm Fidelity’s Eight Roads Ventures unit, TechCrunch reported today, as the buy now, pay later (BNPL) space surges across India.
Venture capital firm General Catalyst led the round, which included Elevation Capital, Arbor Ventures, Lightspeed Venture Partners and Accel. The company is now valued at $350m, according to two sources privy to the development.
Founded in 2020, Uni has built a BNPL app targeting domestic users, helping them settle their bills across three monthly instalments with no interest fee, in addition to rewarding them with a 1% cashback offer if the outstanding amount is paid within one month. Uni said it is distributing $23m to its customers across 50 Indian cities every month without revealing the number of active users.
Fewer than 30 million people in India own a credit card due to the country’s nascent credit rating industry, according to TechCrunch. This gave rise to a flourishing interest-free BNPL scene, reported Reuters last month, which would potentially grow ten-fold within the next four years.
Local consulting group Redseer estimates the Indian BNPL market size will reach between $45bn and $50bn by 2026, up from the current $3bn to $3.35bn, with the number of users hiking from 10 million to 15 million now to between 80 million and 100 million in that timeframe.
Other India-based players in the space also raised funding recently. Digital bank Slice received $220m in series B funding featuring news aggregator Gunosy while BNPL cybersecurity software product creator Drona Pay got $430,000 from investors including payment services firm Credit Saison last month. Digital payment service PhonePe closed a $350m tranche to complete a $700m round led by retailer Walmart and backed by internet group Tencent three months before.
Corporate-backed financial technology developers from other countries have also entered the Indian innovation ecosystem, including Japan-headquartered microfinance services platform Gojo & Company, most recently closing a $41.5m series D round that included financial services firm Higashi-Nippon Bank (through its Local Company Revitalisation Fund), Seven Bank and SBI Group, as well as debt supplied by Credit Saison.
Credit Saison, which is the largest credit card issuer in Japan with $30bn under management, had formed an India and Southeast Asia-focused $55m vehicle dubbed Saison Capital in late 2019, backing fintech players that serve underbanked citizens, having most recently taken part in a $1.5m seed round for open finance platform operator Fego.ai.
Uni co-founder Nitin Gupta had previously co-founded the Indian subsidiary of PayU, Netherlands-based internet group Prosus’ payment processing arm, before helping operate ride hailing service provider Ola’s financial services business.
Lightspeed and Accel were the initial investors in Uni in an $18.5m October 2020 seed round before it had launched its product. Gupta told TechCrunch the company is working on new offerings and is looking to increase its monthly disbursement to $197m in the next nine months.
“The Indian credit market is ripe for explosion and there is vast room for innovation. We found a strong product-market fit with our very first product, the Pay 1/3rd card – a first of its kind card in the market and have not looked back from there,” he added.
“BNPL is growing at a breakneck speed in India and within BNPL we are seeing that the biggest potential lies in the Pay1/3rd category and we are leading this space with our innovative product and customer experience. We are delighted to have some of the best investors in the world partnering with us as we gear up for our next phase of growth.”
– Image courtesy of Uniorbit Technologies Pvt Ltd.
