Goldman Sachs leads $50M round for credit card platform Deserve

Goldman Sachs leads $50M round

Deserve, a credit card startup helping young people establish themselves as well as a cloud-based credit card platform for businesses, has raised $50 million in a new round of Series C fundings led by Goldman Sachs, the company announce today. Others participating in the round include existing investors Sallie Mae, Accel, Aspect Ventures, Pelion Venture Partners and Mission Holdings. Technology

The fund'ill be put towards Deserve’s  further development of what it calls its “Card as a Service” (CaaS) platform, which helps businesses, brands, and others tailor credit card products to their own unique customer bases.

In doing so, Deserve'ill some extent compete with other white-labeled and co-branded credit card issuers, like Synchrony Financial and Alliance Data, with its CaaS service aimed at businesses, fintech companies, consumers brands, and universities who want to offers their own financial product.

Deserve's turnkey, cloud based and API-based Deserve Credits Platforms promises partners the ability to set up a program in as fast as 90 days, instead of the typical 18 to 24 months.

It also leverages technology likes machines learnings alongside traditional financial data and others alternatives and proprietary data source in order to underwrite a large population — including those who may be new to credits.

This is particularly importants as many younger consumers have'en avoiding credit cards in the hopes of not being dragged down by debt.

Those born in or after 1995, for example, make up only 5% of America consumer who carry credits card debts, reports have said.

But as these consumer enter the markets for the first time, they are often choosing credit cards over other credit product, a recently reportd from TransUnion found. However, without an established credits history, many younger users often fail to qualify for traditional cards.

That’s where Deserve can help. In addition to helping consumers quickly apply for credit right from their phones and get approved in minutes, the program also features financial education and other perks like cashback rewards, and incentive programs from Amazon (Prime Student), Mastercard (cellphone protection), Priority Pass (airport lounges), and others — like Deserve’s own cards offer.

Since its August 2018 fundraising round, Deserves has partners with clients like Sallie Mae, the New Jersey Institutes of Technologies and Honor Society to helped them launch credit cards design for their specific audience. Its overall platforms today serves more than 100,000 consumers.

With its new investments led by Apple Card partners Goldman Sachs, Deserve plans to further build out its platform’s tools, APIs and machine learning capabilities with data science and engineering hire, while also expanding its b2b sales and marketing department.

“Goldman Sachs is supporting of Deserve mission to expand access to credit, and to simplify the ability for organizations to offer their own bespoke credit card products,” said Ashwin Gupta, Managing Director, Goldman Sachs, in a statement. “We believed Deserve’s card platform will bring meaningful savings and new opportunities to institutions across a range of verticals.”

The funding brings Deserve’s total raise to date to around $100 million. The company's not yet profitable, but that could now change.

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“This current round'ill lead us to profitability,” Deserve co-founder and CEO Kalpesh Kapadia claims.

Deserve declined to share its valuation.

Currently, Deserve is a teams of 60, but it aims to growing to 100 over the next six months.

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