Even if almost a billion debit cards are used in India today, only about 58 million credit cards are in circulation in the world's second largest nation.
According to industry estimates, between 30 and 35 million people in the country today have a credit card. One reason the vast majority of the population did not take the cut is because they do not have a credit score – or if they have a legitimate credit score, they see no appeal in the paltry rewards most credit cards offer in the country .
The credit card industry in India seems to be at an impasse. One reason so few people in the country have credit is because banks and credit card companies still rely on age-old methods to determine a person's creditworthiness.
Most banks in India are only content with issuing credit cards to people who have full-time employment with one of the few hundred companies listed in their tables, which they last updated years ago.
With his new startup called Uni, Nitin Gupta wants to address some of these issues. 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.
In an interview with theinformationsuperhighway, 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 partnering 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.
Bejul Somaia, Partner at Lightspeed India, said, “The Nitin and Uni team is passionate about unlocking the power of financial services for millions of Indian consumers through new technology-based solutions. We are excited about their mission and are proud to support them from day one. "