The Digital Fifth Newsletter

With fewer investors knocking the doors of large fintech startups for Series C+ funding, there is chatter in the market that funding has dried up and that ‘winter has arrived’. However, has it? VCs are actively investing in Early Stage startups, and Series B has seen similar funding as last year. 37 startups have received Pre Series A funding totalling to USD 120 M as of May 2022, which is almost 50% of what the segment received during 2021. Series A has seen 17 startups receiving USD 429 M till now, which is only 9% less than what the segment received in the entirety of 2021. It’s summer for these startups! Series B has witnessed 10 startups receive USD 435 M and should close the year at par with what the segment received last year.

So why is everyone pressing the panic button?

Series C and beyond has seen less funding because of general negative sentiment worldwide. Only 11 startups received funding for these rounds, as opposed to 44 startups in 2021. With the war beginning in February of this year and the muted performance of startups that have launched their IPOs, investors are being more cautious in their investment approach. Additionally, Series C+ received a whopping USD 5B+ in funding in 2021. Some well funded startups have spent lots of capital to grow disproportionately without having any real revenue or profitability structure in place. Thus, investors are actually waiting for their portfolio to begin performing.

Know more about Indian Fintech Funding and which segments are gaining traction in our report.

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Slice secures $50 mn led by Tiger Global, to boost UPI product

Fintech company slice on Wednesday said it has raised $50 million as part of its larger series C round led by Tiger Global, adding that it will use new capital to boost its new unified payments interface (UPI) product.

The latest funding round also saw participation from existing investors Moore Strategic Ventures and Insight Partners, and a new investor, GMO Venture Partners.

The leading credit card challenger last month launched the integration of UPI into its app for all its existing and waitlisted users in a phased manner.

Source: Silicon India

EnKash launches banking infra API suite for financial service providers

Spend management platform EnKash has launched a card API suite CardX. The suite will come with plug-and-play integration that will enable non-fintech and fintech companies and Banks, NBFCs to launch their own card, BNPL, reward programs, in a hassle-free manner. CardX is also designed to be developer-friendly and can enable multiple use cases of credit card, prepaid cards and wallets. It comes with a complete card management suite and integrated functionalities such as real-time KYC solution, fraud and authorization controls, reward management, multiple credit products like EMI, BNPL and supply chain finance, data analytics and insights, among other essential elements. Using EnKash’s open API stack, businesses can issue credit and prepaid cards to their customers, users, agents, employees, and others, for their respective use cases.

Source: Economic Times

Six-month-old startup StrideOne is incorporated by Stride Ventures’ founders – Ishpreet Gandhi and Abhinav Suri. The startup is licensed NBFC by the RBI. It offers bespoke financial solutions to MSMEs and the startups’ supply chain partners.

StrideOne claims to have an asset under management (AUM) of INR 200 Cr across 20 startups that are working as anchor companies with it. It aims to double down its growth by FY23. 

StrideOne also runs a lending startup, EzCred, a platform to bolster its tech interface. The startup is looking to make more tech-focussed acquisitions in the present year, according to the statement.

As a founder, trust yourself under all conditions as all of the following will keep constraining you: Headwind, Funding Winter, Liquidity challenges, Regulatory challenges, Salary hikes, Attrition, Covid, Overfunded competitor, overzealous investor and what not.

As a founder, you have already taken the biggest risk by starting on an uncharted territory. Situations will keep changing and experts will keep giving their opinions. Just keep moving ahead.

As an operator, Top line and Bottom line are your key focus. Adjusting them (what should grow faster) is critical for your business and don’t read too much into what is written or shared by industry experts.