CardUp Expands Payments and Cash Management Offering with Funding from Sequoia
CardUp, a fast-growing card payments platform for cash management, announces that it has secured S$2.2 million (US$1.7m) in funding led by Sequoia India and SeedPlus in order to grow its payments and cash flow management offering to the SME segment.
CardUp is changing the way people manage their large recurring payments with an online service that allows any payment made by bank transfer today to be shifted to a credit card, regardless of whether the recipients accept credit cards.
Consumers can maximise card benefits such as extended credit terms and the earning of reward points on big payments such as rent to a landlord, taxes, insurance premiums, tuition fees and more.
For businesses, shifting expenses such as payroll, office rent or supplier invoices to their credit card via CardUp provides instant access to interest-free credit of up to 55 days, increasing their access to working capital, improving their cash flow and digitising processes at the same time.
Unlike existing card payment solutions, CardUp does not require participation from the recipient of funds. This has enabled the company to scale up quickly with an average monthly user growth rate of 41% since it launched in late 2016.
CardUp has been able to shift the needle in terms of card spend growth in Singapore. Over S$55 million in payments has been created on the platform in the last 12 months, which represents more than 1% of overall credit card spend growth in Singapore from 2016 to 2017. The company has established partnerships with major banks and credit card providers including UOB, Citibank, Bank of China and Mastercard. These partners promote CardUp and in turn, capture incremental spend on their cards.
The business model has been recognized by industry leaders and regulators for its innovation. The company was one of six companies globally selected for Mastercard Start Path in 2017, part of the inaugural class of The FinLab in 2016, the Singapore-based fintech accelerator between United Overseas Bank and SGInnovate, and a finalist in The Monetary Authority of Singapore’s Global Hackcelerator 2016.
Nicki Ramsay, Founder and CEO of CardUp commented: “CardUp makes the payment of big recurring expenses such as rent, taxes, supplier payments, or even payroll, a more rewarding experience. Individuals and businesses can improve their cash flow by tapping into pre-approved credit lines on their card, whilst banks and payment networks are able to increase overall credit card spend by capturing a new market segment. We are delighted to have secured our first round of institutional investment from investors with deep expertise in the payments space and a strong regional network to help us grow the business further.”
Pieter Kemps, Principal at Sequoia Capital India (Singapore) Pte Ltd said: “Many large companies are built on a simple yet unique insight on how to solve a common problem. Why can’t we use our credit card for some of the largest payments we make? Nicki set out to solve this, and the immediate customer adoption shows there is a need for a platform like this. We have been impressed with the fast growth of CardUp, and are confident in the team’s ability to build out a powerful platform that helps businesses manage their working capital and cash flow challenges.”
Tiang Lim Foo, Operating Partner, SeedPlus commented: “SMEs are the main economic driving force in Asia, but are currently underserved. CardUp is bringing an innovative payments & cash management technological solution to help SME owners better manage their cash flow and payments processes. We are truly excited to be working with Nicki and her team to embark on the mission to improve the economic productivity of SMEs.”
The funding is being used to expand CardUp’s product offering in the SME space with new credit and cash flow management solutions. This is an underserved market as SMEs have previously relied on traditional financing options that may not meet all their needs.