Stashfin raises $270m to expand neobank platform outside India

Image by Kalina Vova | Bigstockphoto

Neobanking platform Stashfin, which offers services in India, has raised $270 million in a series-C equity and debt funding round led by global investors, including Uncorrelated Ventures, Fasanara Capital & Abstract Ventures. With the new round, the startup is now valued between $700-$800 million, up from $135 million in its previous round.

The Singapore-based startup will now use the capital to expand its operations in Southeast Asia and other South Asian markets.

Stashfin, which also has a non-banking financial company (NBFC) license in India, has raised $70 million against equity and $200 million as debt as part of its Series C funding round, as per an official statement, which added that the round also saw participation from existing investors including Altara Ventures, Tencent, Kravis Investment Partners and Snow Leopard.

The latest round takes the startup’s total funding to around $325 million since its inception in 2016.

Tushar Aggarwal, founder and CEO, Stashfin said that the funding is a “key milestone” in the challenging macro environment.

“We are now at the cusp of transforming into a compound startup, offering multiple financial products for consumers with a wide spectrum of credit risks,” said, adding that the neobank aims to grow its customer base by 4-5 times this year.

Stashfin also expects the annualized revenue run rate to rise to $400 million in the next 12-18 months.

The startup has nearly 10 million registered customers and is currently on the trajectory of hitting $100 million in annualized revenue. The startup claims that it is issuing close to 100,000 new cards each month.

In India, Stashfin provides credit line cards to under-represented parts of the society such as blue-collared workers, especially individuals aged between 23 to 38 making less than $500 a month. In May this year, it launched a credit line card especially for women called LiveBoundless.

Stashfin offers credit lines through a Visa card to the Indian middle class, offering loans starting at Rs 10,000. The company disburses around Rs 400-Rs 500 crore of loans a month, it claimed.

Neobanks are typically digital entities and operate online to offer financial services in the form of a transactional platform for merchants, a lending service provider or an account manager.

In India, neobanks don’t follow any standard regulatory code and don’t take bank licenses of their own to operate, instead relying on already accredited banking partners for licensed services. India’s banking regulator, Reserve Bank of India (RBI) has not permitted a 100% digital bank model in India yet.

“We believe these individuals are underserved because the banks cannot offer them cards or credit lines because of high operational costs,” Aggarwal told TechCrunch separately.

Aggarwal further explained why he came up with Stashfin: “When I moved back to India, I had a pretty hard time getting a credit card for almost a year and a half because although I was Indian, the bank saw me as someone new to credit. The experience made me realize that for people growing up in middle-class families, what access to credit meant in terms of paying for tuition classes or whatnot.”

Stashfin is also looking to ramp up hiring in technology and data sciences. From a present team of 430 employees, it is looking to hire another 400 more in the next 6-9 months, according to a separate report by the Economic Times.

It is also preparing to launch a new product line in the insurance space.

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