Mobile-first credit card brand OneCard’s parent FPL Technologies is in talks with Singapore-based Temasek Holdings, among other new and existing global investors, to raise funding at a unicorn valuation, two people aware of the development told BusinessLine.

This comes a month after the Pune-based start-up had announced its Series C funding round, wherein it raised $75 million at a post-money valuation of $750 million. The round was led by existing investor QED Investors along with Janchor Partners, Sequoia Capital India, Matrix Partners and Hummingbird Ventures.

This round came 10 months after a Series B round of $35 million, which according to media reports happened at a valuation of $183 million. The start-up’s valuation jumped nearly 4X post the Series C round.

Responding to this latest development,Anurag Sinha, Co-founder and CEO, FPL Technologies, told this newspaper, “We don’t chase the unicorn status, we are focussed on execution. It might happen but we don’t have any target in mind. We are a three-year-old company and we want to scale. Most of our investors are long term investors like QED, Sequoia, Matrix. We keep in talks with the existing investors, we have to ensure that they understand us well. Some of them have invested in banks as well globally. We keep in talks with the investors, as and when the round happens, we will anyway announce.”

Temasek Holdings declined comment.

FPL Technologies was founded by Sinha, Rupesh Kumar, and Vibhav Hathi in 2019. Sinha, like his co-founders, is a veteran banker. He had led cards, payments and unsecured lending at ICICI Bank among other verticals of consumer banking and payments until 2016.

Fintechs across various segments and usecases saw recording funding inflow in India in 2021, most of them seeing their valuations jump 3-5X in a single round. Making sense of this funding frenzy, Sinha explained, “VCs are one of the first ones to look into the market. Three things are driving this trend: the size of the market, the teams who are building these solutions, and third is execution. Another key factor that’s playing out in India is the role government is playing in India through regulations, the RBI setting up a new department for fintech.”

He added, “Over the past 4-5 years, that mindset has changed a lot. In the back end we are all working with banks both PSUs and private across SME products, savings accounts, personal loans credit cards etc. This is giving confidence to VCs.”

Product offerings

The start-up follows a bank-led business model to offer a co-branded digital credit card called OneCard which was launched in June 2020. The core product for the start-up, however, is a credit score tracking and credit management product called OneScore. Credit scores get updated every month and the app’s in-built tool guides the user giving personalised tips of how manage spends better. The app currently has 12 million users and 2 million monthly active users.

Interestingly, the start-up claims to not access email IDs and SMSes of the user, as all it needs is the credit history of the customer for the app to run. Parallel to this the credit card offering was introduced focusing only on niche customers, coming through OneScore or through referrals. Sinha said that almost 30-35 per cent new customers are coming through referrals, which is not common for credit cards. Though there is an ‘apply’ option on the website, it is available only to Apple users as of now and the android version is still on beta.

For the co-branded credit card, the start-up has partnered with several banks including Federal Bank, IDFC Bank, Bank of Baroda’s BOB Financial Solutions, South Indian Bank and State Bank of Mauritius. The credit cards are offered on the banks’ balance sheets and OneCard gets a part of the commission of onboarding and managing customer experience. Further, credit limit and interest rates are similar to what the respective bank offers.

The mobile-first credit card comes with app in-built options to manage everything that the customer needs support for including checking balance, rewards, losing card, blocking of card, reporting loss of card. All of this can be done through an on/off option in the app to switch off the card or particular features.

OneCard also lets the customer borrow money against fixed deposits set up by them in the bank. This secured lending product helps in building the consumer’s credit history while reducing the risk of bad loans and thus not need multiple documents like play slips and other apart from KYC.

“For us, customer experience is key to gain market share. The tie-ups with multiple banks are needed as different banks have different risk appetite. Depending on this, some customers might not be acceptable to a certain bank but might fit the criteria of the other. This also allows us to diversify our liability side,” Sinha added.

Expansion plans

While he sees large opportunities on commercial credit, currently Sinha wants to stick to consumer credit. “We want to build features and offerings on the consumer credit side that will scale faster. And we will be creating deeper products, origin issues have already been solved by companies like BankBazaar and PaisaBazaar. Also, partner banks keep on pushing their products as well. Most of the funding we have raised goes into expanding teams for building new products,” Sinha said.

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