Fintech Startup Karbon Card Raises Capital from Y Combinator

The company will use the funds to step up its product development, hiring plans, and operations

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Fintech startup KarbonCard has raised an undisclosed amount in growth capital from accelerator Y Combinator (YC), the startup said in a press release on Monday.

Karbon Card

The company will use the funds to step up its product development, hiring plans, and operations.

"We figured that it was challenging for the early-stage startups to avail corporate cards from the banks wherein the banks ask for 110 per cent deposit guarantee, a personal guarantee from founders, and a huge amount of documentation and time. That was the Eureka moment for us. We thought if we offered the corporate cards with no fixed deposits, personal guarantees and built a process in just five minutes, then we would solve a lot of problems," said Pei-fu Hsieh, co-founder, KarbonCard.

Founded in 2019 by Pei-fu Hsieh, Amit Jangir, Kartik Jain, and Sunil Sinha, the startup is now joining YC which previously groomed global corporate card startupBrex, the company claims.

"Karbon has helped our portfolio companies save significant time not having to access the slow traditional banks for a higher credit limit for corporate expenses. Startup founders and digital small and medium enterprises (SMEs) want to focus on building their business and not spend time doing paperwork in today's digital world," commented Anup Jain, managing partner, Orios Venture Partners.

The Bengaluru-headquartered company offers startups with four key benefits such as credit of up to INR 5 crore with no personal guarantee or fixed deposits, provides seamless payments transactions through corporate cards to its customers, offers rewards specific to the startups' requirements such as Amazon Web Services (AWS) credits with $50,000 or Software-as-a-Service (SaaS) products. Lastly, it helps offer expense management through WhatsApp in a very intuitive way.

The company also feels that a YC tag would help the company create more value in the Indian startup ecosystem and help mitigate the biggest challenge of convincing startups about the existence of a product like Karbon Card

With over 1500 clients in less than two years, the company has managed a 35 per cent month-on-month growth in revenues despite the pandemic that slowed down corporate spending to a large extent. However, as the economy starts reviving, Karbon expects faster growth too. Additionally, considering the recent RBI’s Mastercard ban, Karbon has been quick to integrate with Visa network to provide an uninterrupted experience to their customers.

The company has raised $3.5 million so far from investors such as Orios Venture Partner and US-based 2AM VC and is in the process of raising a more significant round in the next few months.

To this, Hershel Mehta, co-founder, 2 AM VC, added, "The rapidly growing Indian startup ecosystem needs solutions like KarbonCard. Moreover, there are more than 40 million SMBs in India.  Karbon is well-positioned to serve this huge untapped market."

While Indian SMBs and startups are warning up to the idea that corporate cards can solve some of their major pain points, globally the market is evolving fast reflecting the growing need to simplify expense management with players such as Brex, Ramp and Divvy amongst others, reads the press release of KarbonCard.