FinTech News
Deserve Announces $50 Million Round Led by Goldman Sachs
Another FinTech (or FinTech-adjacent) firm has just announced a big fundraising round. As TechCrunch reports Goldman Sachs is leading a $50 million Series C for Deserve. Also joining the round are previous investors Sallie Mae, Aspect Ventures, Mission Holdings, Pelion Venture Partners, and Accel. Although Deserve’s co-founder and CEO Kalpesh Kapadia stated that this latest round would lead the company to profitability, he declined to disclose what valuation the round was raised at.
While Deserve does offer a few consumer credit cards of their own, the company’s main focus is what they’ve dubbed their “Card as a Service” platform. Through a series of partnerships, Deserve says they’re able to offer turnkey co-branded credit card programs to fellow FinTechs as well as other institutions and companies. The firm asserts that this allows brands to launch cards in as little as 90 days while traditional routes would typically have an 18 to 24 month lead time. Incidentally one set of branded cards Deserve helped launched comes from Sallie Mae, which (as mentioned) is an investor. These cards geared towards students and other young adults also show off some of the Deserve’s other features, such as using machine-learning and financial data-incorporating algorithms to make underwriting decisions.
In terms of Deserve’s self-branded cards, the company does offer some interesting perks. For example their Deserve EDU card includes Amazon Prime Student after customers make their first purchase with the card. Meanwhile the Deserve Pro offers a Priority Pass to cardholders after they spend $1,000 on the card — although this version of Priority Pass Select is different from what high-end cards offer, with Deserve valuing the membership at just $99. Additionally cardholders can earn statement credits for products such as Mint Mobile and Lemonade renters insurance.
Commenting on the company’s investment in Deserve, Goldman Sachs managing director Ashwin Gupta said in a statement, “Goldman Sachs is supportive of Deserve’s mission to expand access to credit, and to simplify the ability for organizations to offer their own bespoke credit card products. We believe Deserve’s card platform will bring meaningful savings and new opportunities to institutions across a range of verticals.” Also of note is that investor Goldman Sachs recently launched its first credit card: Apple Card.
Deserve’s $50 million round continues what has been a fairly strong year for FinTech. This includes Q2 setting a quarterly record with more than $100 million in funds flowing to FinTech startups. Although 2019 still might not measure up to 2018’s record, announcements like these show that there’s still a healthy appetite for financial technologies among investors.
