Lending and payments platform Slice has raised $50 million, led by existing investor Tiger Global as part of a larger Series C round, as the company looks to shore up capital and insulate itself in a difficult funding environment.
The round also saw participation from its existing investors Moore Strategic Ventures and Insight Partners, and new investor Japan's GMO Venture Partners, it said on June 1.
While Slice did not reveal its valuation after the funding round, Moneycontrol learns from sources that the funds were raised at a valuation of $1.5 to $1.8 billion.
Slice, which lends to sub-prime and new-to-credit customers, mainly millennials, through its credit-linked Visa cards, was looking to raise around $100-150 million and was aiming at a valuation of $2-2.5 billion, according to multiple sources.
However, owing to the current slowdown in startup funding, the fintech could not attain the planned valuation. The company is said to be in talks for the remainder of its Series C round.
Amid the macro environment of high oil prices, stock market volatility and high interest rates, venture funds globally have turned cautious while investing and questions about unit economics and profitability are key while choosing to invest.
In line with the current scenario, Slice is aiming to turn profitable over the next few months. Moneycontrol had reported on May 25, citing sources, that Slice has also turned conservative in a bid to cut down on its cash burn and grow its revenues to achieve profitability soon.
"With its core credit product set to achieve profitability in the coming months, Slice will be utilising this new capital for shoring up the balance sheet to support the expansion of its new UPI product," the company said in a statement.
In a key departure from its previous model, the company has limited its standout 'Pay-in-3' interest-free feature to only a few of its card customers as it looks to reduce its credit risk.
Slice’s ‘Pay-in-3’ allowed customers to split their repayments into three parts for no extra charges or interest. Now only those customers with a good repayment track record and/or a good credit score will be allowed to access the feature on its Visa card which the company calls a ‘challenger card’.
However, the company continues to allow customers to avail of the feature for its in-app purchases where it has strong revenue-sharing tie-ups with brands including Licious, Miniso, Swiggy, BigBasket, and MakeMyTrip among a number of others.
The move is likely to help the company to draw transactions toward its revenue-generating offerings.
Additionally, the company announced a realignment in its strategy on May 19 from only lending in partnership with NBFCs to becoming mainly a payments app starting with the Unified Payments Interface (UPI).
Commenting on the company's UPI plans, founder and CEO Rajan Bajaj said, "With the significant growth in wallet share of slice card, it became increasingly clear that our customers would love to use slice for all their payment needs. Driving on that, we made our next important product launch with UPI which has been gaining strong early traction."
Alex Cook, Partner at Tiger Global sad on the investment, "We are delighted to continue our partnership with Rajan and his team as they improve and expand payment products with the goal of making money more relatable for the consumer."
The company had turned unicorn in November 2021, i.e. a privately funded company valued at $1 billion or above. It had raised $220 million in its Series B round co-led by Tiger Global and Insight Partners, valuing it at $1 billion.
Founded by IIT Kharagpur alumnus Bajaj in 2016, the company currently has 12 million registered users.
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