Kiwi Secures $24 Million Funding to Launch Credit Lines on UPI
The Fintech startup Kiwi has successfully raised $24 million in a new funding round led by Vertex Ventures, which operates across Singapore, Southeast Asia, and India. The funding round also saw participation from notable existing investors including Nexus Venture Partners, Omidyar Network, and Stellaris Venture Partners.
Plans for Credit Lines on UPI
With the fresh capital, Kiwi intends to roll out credit lines on the Unified Payment Interface (UPI) within the next six months. This initiative has been under development since the Reserve Bank of India (RBI) granted approval in September 2023.
Current Offerings: RUPAY Credit Cards
Currently, Kiwi is issuing RUPAY credit cards in partnership with Yes Bank and Small Finance Bank. This allows consumers to make payments via UPI, which remains the most popular retail payment method in India. Additionally, Kiwi aims to expand its offerings to include credit lines on UPI through collaborations with various banks, providing users access to pre-approved credit limits directly via their UPI-compatible savings accounts.
Growing Interest in Credit Lines on UPI
According to a report from August 18, there has been a gradual warming among banks towards the implementation of credit lines on UPI. This shift indicates a positive regulatory environment and a rising interest from financial institutions, opening avenues for fintech companies like Kiwi to innovate and develop new UPI products.
Statements from Kiwi’s Co-Founder
Anup Agarwal, co-founder of Kiwi, expressed optimism about the new capital, stating, “This funding will help us focus on building the products we plan to launch, alongside our existing offerings. We are particularly excited about the line of credit on UPI, which ties in with the UPI-enabled credit cards that we have already launched.”
The Journey So Far
Founded in 2022 by former bankers Agarwal, Siddharth Mehta, and Mohit Bedi, Kiwi has raised a total of $43 million through three equity financing rounds. Since its launch, Kiwi has issued over 200,000 RUPAY credit cards and currently processes over 5 million merchant transactions each month across 600 cities in India.
Future of Credit Instruments with UPI
Agarwal believes that there is a significant potential for Indian consumers to utilize credit instruments through UPI. He remarked, “The possibility of integrating credit with UPI is immense. We believe it can alter consumer behavior, much like UPI has revolutionized digital payments in India.” This sentiment is echoed by investors who see the marriage of UPI with credit products as a promising frontier in the financial landscape.
Investor Attention on the Fintech Sector
The rapid adoption of UPI, which sees around 19 billion transactions monthly, has attracted attention from both global and local investors. They are increasingly optimistic that the activation of credit alongside UPI could trigger a new growth wave within India’s digital payment ecosystem. This rising interest is further highlighted by other players in the market, such as Scapia, which recently raised $40 million and also offers RUPAY credit cards integrated with UPI.