How Karbon Card Is Making Credit System Inclusive We figured that it was challenging for the early-stage startups to avail corporate cards from banks, says Amit Jangir, co-founder, Karbon Card

Karbon Card, an emerging neobank for the new-age startups and small and medium businesses, aims at saving money and time of their customers and making payments simple.

So far, Karbon Card has raised $32 million in various rounds. The last was a Series A round of $15 million led by Olive Tree Capital, Harmony and Avenir Growth Capital. The fundraise also saw participation from existing investors Ramp, Mercury and Orios Venture Partners. Karbon raised $12 million in pre-Series A round in September 2021.

The corporate credit card segment is on a high growth trajectory in India catering to mostly startups and SMEs as they are mostly ignored by the large corporate banks. "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," said Amit Jangir, co-founder, Karbon Card.

"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. There is a huge opportunity in this segment with around 50 million MSME enterprises in India contributing 6.11 per cent of the GDP in manufacturing and 24.63 per cent of the GDP to the service sector but they hardly are a part of the formal credit system. Over 40 per cent of credit allotment to MSMEs in India is through informal channels at the moment," he added.

Talking about the challenges, he said, "Regulation changes are often faster than we anticipated. RBI has introduced changes quite rapidly and decisively - all to benefit the end customer - from banning banks from issuing credit cards to changes in recurring transactions on credit cards to forming guidelines for banks to partner with fintechs so as to modernize the banking tech. Established companies require a significant amount of convincing before even trying. Bigger companies see the value of the product which is quite visible to the finance team but not so visible to other stakeholders. Challenge is to convince multiple stakeholders which ends up taking a lot of time to close a lead."

Giving an insight into its future plans, he said, "AWS discounts are becoming popular as it's the most popular Cloud platform and also the most affordable one. Payout is being widely adopted by many existing customers as well as new customers who need a new and improved system to handle their payments via bank."

Recently, Karbon Card raised INR 55 crore debt finance from Northern Arc Capital, UC Inclusive Credit Private Limited (UCIC) and Oxyzo financial services.