FPL Technologies founders (from left to right) Vibhav Hathi, Anurag Sinha and Rupesh Kumar.
Fintech FPL Technologies has raised $75 million as part of its Series C funding led by existing investor QED Investors along with Janchor Partners, Sequoia Capital India, Matrix Partners and Hummingbird Ventures.
With this round, the company’s valuation now stands at $750 million, in touching distance of the $1 billion number which will vault the startup into the coveted unicorn club. The company did not disclose its valuation during its last funding round in January 2021.
FPL Technologies is a digital lending fintech and has two products – OneCard and OneScore. OneCard is a Visa credit card offered in partnership with IDFC First Bank, Federal Bank, SBM Bank, among others.
OneScore was the startup’s first product which is a digital credit score platform offering free credit score checks and personalised insights with which customers can monitor and manage their credit health. The startup said that there are one crore OneScore users and 2.5 lakh OneCard credit cards have been issued.
In an interview with Moneycontrol, FPL Technologies co-founder and CEO Anurag Sinha said that the startup has not put a timeline on achieving the $1 billion valuation, but continues to be in talks with investors.
“The market is growing really fast and we will keep looking for the right investors who understand this space well. The market opportunity in the credit space is very large which is driving investments,” Sinha said.
The startup will use the current funding to grow its user base, team and expand into more locations in the country. However, Sinha did not give guidance on the startup’s user base growth targets.
Founded in 2015 by Sinha, Rupesh Kumar, and Vibhav Hathi, who come from banking backgrounds, the company competes with the likes of Slice, Uni, Indiabulls Dhani and now even PayU’s LazyPay which provide credit-related card products to customers.
These offerings are an extension of the fast-growing digital Buy Now Pay Later (BNPL) and EMI space which aims to cater to customers usually not eligible for credit cards. However, for FPL Technologies the focus is not new-to-credit customers like the other players.
While the competitors offer cards with an option to pay later or in parts, OneCard is a straightforward credit card and focuses on customers with existing credit history. Seventy percent of FPL Technologies’ customers are in the age group of 23-30 years.
“For our product the credit risk sits with the bank, unlike other players who take on the credit risk themselves. The revenue from the card goes to the bank directly and we have a revenue-sharing agreement with them,” Sinha explained.
At a time when credit startups players are focusing on bringing the spotlight away from traditional credit cards, and making digital lending and BNPL the new buzzword, will selling a credit card be a challenge?
“Only 34 million Indians have credit cards. So, the market opportunity for credit cards is huge too. We believe that there are around 90 million people eligible for a credit card. There is a large market for all players,” according to Sinha.
India has a very low credit card penetration of only three percent. While BNPL players are using the hesitancy and eligibility criterion related to credit cards as a chance to penetrate into the market, players like FPL Technologies still see a case for credit cards with the abysmally low penetration.
In its last Series B funding round, the company had raised $35 million. The latest round of investment brings FPL Technologies’ total funding since launch to approximately $125 million.