Fintech startup Kiwi has secured $13 million in its latest funding round, led by Omidyar Network India. Nexus Venture Partners and Stellaris Venture Partners, existing investors, also participated in this round, marking Kiwi’s second institutional fundraise since its founding in February 2023.
Previously, Kiwi raised $6 million in May, which saw participation from Nexus and Stellaris, along with angel investors.
The virtual credit card platform, launched in June, issues virtual RuPay credit cards in partnership with Axis Bank, enabling users to link the card to the Unified Payments Interface (UPI) service on its app for digital payments.
The Reserve Bank of India permitted the use of RuPay credit cards on UPI in June 2022, boosting the credit ecosystem’s growth.
Kiwi plans to use the funds to introduce new products, including no-cost equated monthly installments (EMI) on UPI, and initiate credit lines on UPI, authorized by the National Payments Corporation of India (NPCI) earlier this year, which operates the UPI service.
“We have launched the (RuPay credit card on UPI) product and have seen a good product market fit. With this round, we now look to scale up our marketing efforts, double down on tech architecture and keep improving customer experience. We will make some senior appointments in this direction,” said Siddharth Mehta, cofounder of Kiwi, who was also the former chief executive at payments platform Freecharge.
Co-founded by Mohit Bedi, a former Axis Bank and PayU executive, and Anup Agrawal, a former business head for PayU’s credit arm, Lazypay, Kiwi aims to partner with two new banks in the next six months for virtual RuPay cards.
Since its launch, Kiwi has issued 25,000 virtual credit cards, with users making an average of 17-18 transactions per month and monthly spends of about Rs 22,000 per user, Mehta explained.
For every transaction using the virtual Axis Bank Kwik RuPay Card through its app, Kiwi offers points redeemable as cashback in the customer’s bank account.
“Increasing access to affordable and convenient financial products beyond digital payments and ensuring deeper and more consistent usage of formal credit is the critical next step in advancing the financial inclusion journey of India’s next half billion. We are thrilled to lead this investment in Kiwi,” said Treasa Mathew, director, investments, Omidyar Network India.
While the majority of Kiwi’s customers are presently from the top eight cities in India, the company plans to expand its service to new users, including in tier 2 and 3 cities. Kiwi aims to issue 500,000 virtual credit cards over the next 12 months as it welcomes more banks on board.