The credit card industry in India seems to be stuck. According to industry estimates, between 30 and 35 million people in the country today have at least one credit card, with up to 58 million in circulation. Compare that to nearly 1 billion debit cards.
One reason the vast majority of the population didn't take the cut is because they have no credit history. And so, few people have a credit score because banks and credit card companies still use age-old methods to determine a person's credit score. For example, most banks in India can only issue credit cards to people who have full-time employment with one of the few hundred companies listed in dated tables that the banks maintain.
Nitin Gupta wants to address some of these problems with his new startup Uni. And he's one of the few people in the country who can do it. He was a co-founder of PayU India and then headed the hail-fighting company Ola’s Financial services business.
During his tenure at PayU, the startup established a dominance in the country's payment processing business. And at Ola, he launched Olamoney Postpaid, a service that customers can use to pay for their journeys at a later date. Olamoney, valued at $ 250 million last year, is now one of the largest financial services companies in the country.
Reputable VCs are now ready to bet on Gupta's new company.
On Tuesday, the university announced that it had raised $ 18.5 million in its Lightspeed and Accel-led seed funding round . The startup currently has no product, but it took Gupta just two months in the midst of a global pandemic to spark one of the largest seed funding rounds in India.
Jayanth Kolla, founder and chief analyst at consulting firm Convergence Catalyst, said, “A $ 18.5 million seed equity loan for a two month old startup with no product or MVP based only on the founder's credentials and story is the first instance of a pure Silicon Valley financing in India. "
In an interview with TechCrunch, Gupta said he was joined by two other senior executives – Laxmikant Vyas and Prateek Jindal – who have outstanding records in the financial services business.
He declined to reveal what exactly Uni’s product or line of products would look like, but suggested that Uni build the modern consumer credit card.
"It seems very obvious when it comes out and people will wonder why no one else thought of it," he said, adding that he is working on partnerships with several banks.
Digital payments adoption has grown exponentially in the country over the past five years, but the credit card business is still struggling to make progress, he said, adding that he sees an opportunity to grow the credit card base to 200 million over the next five years expand 5 years.
"The Nitin and Uni team is passionate about unlocking the power of financial services for millions of Indian consumers through new technological solutions," said Bejul Somaia, partner at Lightspeed India. "We are excited about their mission and are proud to support them from day one."