Y Combinator-backed Karbon Card raises $12 million in latest funding round
The capital will be used to step up product development and operations, as well as for hiring to double its staff strength to 60 over the next six months.
Founded in 2019 by Pei-fu Hsieh, Amit Jangir, Kartik Jain and Sunil Sinha, Karbon was selected by Y Combinator for its Summer 2021 batch. It has previously raised $3.5 million from Orios Venture Partner and US-based 2AM VC.
“We are solving a major challenge faced by Indian startups and small businesses while availing corporate cards from the banks that ask for 110% deposit guarantee, personal guarantees and massive amount documentation,” CEO Pei-fu Hsieh said. “Karbon’s corporate cards eliminate all these hurdles and provide solutions in just five minutes.”
The Business Model
Karbon Card, which makes money mostly off interchange fees, offers corporate cards to small businesses and startups for company usage. Using personal credit cards affects credit score, leads to reimbursement hassles and creates confusion, according to the company.
ALSO READ TECH NEWSLETTER OF THE DAY
This corporate card offers startups four key benefits:
- Credit of up to Rs 5 crore with no personal guarantee or fixed deposits
- Payment transactions through corporate cards to its customers
- Rewards specific to a startups’ requirements, like AWS credits
- Expense management through WhatsApp
With over 1,500 clients in less than two years of operations, Karbon has reported a 30% month-on-month growth in revenue despite the Covid-19 pandemic that slowed down corporate spending to a large extent. As the economy starts reviving, Karbon expects 35% month-on-month growth in the next 8-12 months. It has partnered with Visa Inc. to provide uninterrupted experience to customers in the largely untapped SME market in India.
“We are impressed with what Karbon has built so far and are looking forward to seeing them deliver more value for Indian SMBs and startups,” said Karim Atiyeh, cofounder and chief technology officer at Ramp.