Credit Card Startup Raises $50M From Goldman Sachs And Others
Deserve, a Silicon Valley startup providing credit cards to those excluded from traditional lending, raised $50 million in the latest funding, CNBC reported.
What Happened
The Series C funding round was led by Goldman Sachs Group Inc. (NYSE: GS). Other investors included SLM Corporation (NASDAQ: SLM) — better known as Sallie Mae, and venture capital firms Pelion Venture partners, Aspect Ventures, Mission Holdings and Accel.
Deserve raised $17 million in August 2018 in a funding round led by Sallie Mae and Accel.
Accel, an early investor in Facebook (NASDAQ: FB), has been one of Deserve’s earliest backers. The VC firm led another $12 million funding round for Deserve in October 2017 previously.
You can check out dozens of up-and-coming fintech companies at the fifth annual Benzinga Global Fintech Awards on Nov. 19 in New York City.
Credit Card For Millenials
Deserve was started in 2013 by Kalpesh Kapadia with the aim to provide credit cards to young adults who can’t establish a prior credit history or get a cosigner.
The startup utilizes machine learning alongside financial data to judge creditworthiness, instead of the traditional FICO scores, allowing it to reach out to a wider market, especially among college students and recent immigrants.
Credit Card As A Service
Deserve aims to offer “credit card as a service” to traditional financial institutions, with this funding. The startup will provide its technology to the companies to help them modernize their credit scoring systems.
“Most of the industry still relies on 1970s-era technology, including mainframes and [COBOL programming language], Kapadia told CNBC. “There’s a need for a modern, mobile-first, digital-first, highly configurable solution that’s completely in the cloud.”
“Goldman sees the value in that, given they didn’t have any legacy infrastructure when they started Marcus,” Kapadia added.
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