FinTech startup focused on millennials Slice raised $20m as a part of a fresh funding round led by Blume Ventures and Gunosy Capital as it looks to double down on its growth in the coming months.
The Bengaluru-based company will use the funds to diversify its offerings and expand its team, founder and chief executive Rajan Bajaj said. The fresh capital takes the startup’s total equity funding to $30m since its inception.
The Slice app shows hyperlocal deals from restaurants, and also gives back up to 2% cashback on each transaction that is redeemable to cash. One of the ideas behind the rewards is to have people engage with the app more often so that they know how much money they are spending.
Slice issues credit and payment cards to this segment in partnership with Visa and SBM Bank India Ltd., allowing them to build their credit scores and gain through rewards and discounts from payments.
The startup is now bringing rewards to its app as it attempts to turn the plastic card into a larger financial instrument. Furthermore, to make it easier for members to pay their bills and face additional charges, Slice now offers them the ability to split their bill and make the payment in a duration of up to three months.
It is focussed on the new age millennial and Gen Z segment, with an average age of 23, that have largely been rejected credit cards by large banks, due to inadequate credit scoring around this demographic. It provides millennials with a credit line starting from ₹10,000 up to ₹10 lakh.
Slice continues to be raking in debt to fuel its credit operations. Its non-banking financial company arm raised ₹165 crores in debt capital during 2020-21 from 18 financial institutions including Northern Arc Capital, Vivriti Capital, AU Small Finance Bank, InCred Financial Services among others.
Slice says it has three million registered users and is currently registering a 25% monthly volume growth. Slice has also been backed by Das Capital, Finup, Simile Venture Partner, EMVC, Tracxn Labs, Better Capital, Sachin Bansal’s Navi and angel investors such as Kunal Shah.
Commenting on the startup’s goals, Bajaj said, “Banks shy away from issuing millennials a credit card, since they lack a credit score and customer acquisition cost for this segment can be high, owing to the credit underwriting needed. slice wants to change this paradigm for millennials. Currently, slice is the primary card for payments for 55% of its users, and 45% of our customers haven’t used a credit card before.”
Echoing a similar sentiment, Gunosy CEO Shinji Kimura added, “Slice’s biggest advantage is how well they understand millennials and Gen Z. Their approach to solving their issues has been truly refreshing and building something simple and hassle-free has been a part of their DNA since inception. The slice super card has the potential to fundamentally change the way the next generation thinks about the concept of credit cards altogether.”
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