OneCard Raises $28.5 Million in Latest Funding Round, Valued at $1.4 Billion

OneCard, a mobile-first credit card startup, has raised Rs 239.4 crore (approximately $28.5 million) in a new funding round led by Better Tomorrow Ventures, Peak XV (formerly Sequoia Capital), and Z47 (formerly Matrix Partners). This marks OneCard’s first equity investment in 2024, following earlier debt funding in January.

The company’s filing with the Registrar of Companies (RoC) suggests that OneCard will issue 72,048 cumulative preference shares at Rs 33,228.3 each to raise the Rs 239.4 crore. The funding round has already raised Rs 71.4 crore, with contributions from Better Tomorrow Ventures, Peak XV, and Matrix Ventures. Specifically, Better Tomorrow Ventures has invested Rs 42 crore, Peak XV has contributed Rs 8.4 crore, and Matrix Ventures has put in Rs 21 crore. The remainder, Rs 168 crore, is expected to be raised in subsequent tranches.

According to the startup data platform, TheKredible, this investment round pushes OneCard’s post-money valuation to Rs 11,747 crore or around $1.4 billion. The valuation marks a significant jump for the company: it was rumored to be seeking $100 million at a flat valuation in September 2023. As of now, OneCard has raised over $350 million in funding to date, having reached unicorn status after securing $100 million in a round in July 2022.

OneCard is one such co-branded credit card provider mainly targeting first-time users, branded by Pune-based FPL Technologies. OneCard has tied up with various banks, namely IDFC First Bank, Federal Bank, and SBM Bank. Besides this, it also provides an app called OneScore where the user can monitor their credit scores and behaviors. In September 2023, OneCard further expanded its offerings by partnering with Indian Bank for full digital control over credit card usage by users. This includes features such as real-time tracking of transactions, spending management, and EMI conversions.

OneCard’s topline growth has been impressive. For the fiscal year 2023, the company reported a six-fold increase in its operating revenue, which surged from Rs 97.8 crore in FY22 to Rs 593 crore in FY23. But then, the company witnessed a significant upswing in losses too. Net losses had climbed 2.2 times to Rs 405.6 crore in FY23. OneCard is yet to file in its FY24 annual financial reports.

Despite the challenges, expanding into the virtual arena with innovative credit card products for first-time users in the financial technologies space bodes well for future growth. The firm’s target is to offer a fully digital and integrated experience of financial management to its users, something that has resonated in a rapidly digitizing Indian market.

The new funding will help OneCard accelerate product development, increase its user base, and further enhance the company’s technology offerings, especially as the company attempts to satisfy new credit users in India. With its strong institutional backing from investors such as Peak XV and Z47, which jointly own a 40% stake in the company, OneCard is well placed to continue innovating and expanding its footprint in the Indian credit card market, which has immense competition.

source entrackr