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Bengaluru-based fintech startup Karbon Card has raised INR 55 Cr in a debt financing round from Northern Arc Capital, UC Inclusive Credit (UCIC) and Oxyzo Financial Services.

Karbon would use the funds to empower and enable startups and small and midsize businesses (SMBs) with corporate credit cards which they can use as flexible growth capital, it said in a statement. 

UCIC, incubated by Unitus Capital, is an impact focussed Non-Banking Financial Company registered with the Reserve Bank of India (RBI), while Oxyzo is the lending arm of OfBusiness and is backed by SoftBank. 

This is the first debt round raised by the startup. Karbon has raised about $32 Mn in equity so far from global and marquee investors such as Ycombinator, Ramp, and Olive Tree Capital amongst others, it said.

In February 2022, Karbon Card raised $15 Mn in a Series A round led by Olive Tree Capital, Harmony and Avenir Growth Capital. The fundraise also saw participation from existing investors Ramp, Mercury and Orios Venture Partners.

Founded in 2019 by Pei-fu Hsieh, Amit Jangir, Kartik Jain and Sunil Kumar, Karbon Card offers corporate cards to small businesses, enterprises, corporates and startups. It offers varied expense management features such as petty cash management, expense report automation, prepaid cards for business expenses, travel expense management, among others.

Karbon currently provides corporate cards and expense management solutions to over 2,000 startups and SMBs.  

It also provides Visa-issued corporate cards (both virtual and physical) and empowers the finance team to control and track expenses for the company.

“We believe that partnering with these stalwarts goes a long way in consolidating our credibility and presence in the new-age banking ecosystem. We will be allocating these funds to expand our customer base and become the preferred neo-banking partner for all startups and SMBs in India,” said Kartik Jain, cofounder of Karbon Card.

Karbon Card claims to offer startups four key benefits such as credit of up to INR 25 Lakh in cash with no personal guarantee or fixed deposits, provides seamless payments transactions through corporate cards to its customers, offers rewards specific to startups’ requirements such as AWS credits at 12% discount or SaaS products. It helps offer expense management through WhatsApp in an intuitive way.

Karbon has also launched a banking product for small businesses called Karbon PayOut to make vendor and salary payments easier and faster.

The fintech startup competes with the likes of fintech unicorn Razorpay that acquired IZealiant Technologies in March 2022, marking its fifth acquisition in four years; Happay, a business expense, payments and travel management platform, which was acquired by member-only fintech and ecommerce platform CRED in 2021; Mumbai-based Kodo that raised $8.75 Mn in a seed funding round last year to accelerate its growth plans by hiring across engineering, product, sales and credit and operations, among others.