Goldman Sachs leads $50m Series C funding round for credit card platform Deserve
Credit card platform for people and businesses with little credit history Deserve has secured $50 million in an equity funding round led by Goldman Sachs.
The Series C round also saw participation from existing investors including consumer banking firm Sallie Mae, venture capital [VC] for seed, early and growth-stage companies Accel, the five-year-old VC founded by industry veterans Aspect Ventures, the VC on the look out for entrepreneurs who “shoot for the moon” Pelion Venture Partners, and the investment firm founded by billionaire entrepreneur Saurabh Mittal: Mission Holdings.
Putting the funds into its “Card as a Service” (CaaS) platform, the Silicon Valley start-up says it wants to help businesses in particular tailor their credit card products to their own customers.
“There’s a need for a modern, mobile-first, digital-first, highly configurable solution that’s completely in the cloud,” says Deserve’s CEO Kalpesh Kapadia in a phone interview with CNBC. “Goldman sees the value in that, given they didn’t have any legacy infrastructure when they started Marcus.”
Deserve’s cloud and API-based credit platform uses machine learning to enable consumers to obtain a credit card in 90 days, instead of the typical 18 to 24 month industry standard. This could change the current statistics which see only 5% of those born after 1995 making up the credit card user base in the US, according to TrasnUnion.
The cloud-based fintech will now be competing with other companies in the white-label and co-branded credit card space, including Synchrony Financial and Alliance Data.
In a company statement, Kapadia says “this current round will lead us to profitability”.