Fintech start-up Slice raises $ 15.5 million from existing investor

Fintech startup Slice has raised $ 15.5 million in new funding from Japan-based Gunosy Capital, an existing investor in the Bengaluru-based startup.

Slice had passed a special resolution to issue 1,12 50,000 Series A6 CCDs of Rs 100 each to raise Rs 112.5 crore or $ 15.5 million in mandatory convertible debt, according to regulatory documents.

It should be noted that Gunosy had conducted a $ 6 million round at Slice in June 2020 in participation with EMVC, Kunal Shah, Better Capital and Das Capital. Slice had also picked up $ 5.4 million in debt from several investors in November.

This investment will make Gunosy a major shareholder in Slice, controlling a 17.18% stake on a fully converted and diluted basis. After the current investment, the promoters’ stake was reduced to 9.11%.

The five-year-old startup offers a youth-focused physical and virtual card that enables students and salaried professionals purchase unsecured products and services online on EMI through an app and help them establish credit scores.

According to the company, it was issuing co-branded Slice cards at an annual rate of more than four new lakh users as of March 2020 and has a presence in 18 cities in India, including Bengaluru, Mumbai, Chennai and Delhi.

According to Fintrackr, the company run by Rajan Bajaj recorded a quadruple jump in his operating income at Rs 29.88 crore in FY20 versus Rs 7.41 crore in FY19 and he had managed to cut his losses by over 81% to Rs 1.87 crore in FY20 and recorded positive operating cash flow during the period.

Notably, Slice works with its subsidiary Quadrillion Finance Private limited, an NBFC that funds the lines of credit the company provides through its cards. According to Fintrackr, the subsidiary recorded a turnover of Rs 11.82 crore and posted a profit of Rs 89.2 lakh in fiscal year 20.

Blume Ventures, Traxcn Labs, and Chinese company Finup are Slice’s primary funders and compete with many companies that have worked around the “buy now, pay later” or BNPL concept.

Notable players in this space include Zest Money, KreditBee, and Lazypay, with major PoS Pine Labs also gearing up to join. The Capital Float credit marketplace has also made the BNPL vertical its main focus.

In recent times, BNPL has garnered considerable investor interest as millennials in India are actively using this feature to purchase products and services. KreditBee had scored a $ 145 million Series C round in March while Zest Money is in talks to raise $ 80-100 million new and existing investors.

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