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June 16, 2024

Fintech Unicorn Slice Secures $20 Mn Debt from Neo Asset Management

Bengaluru-based fintech startup slice has successfully raised $20 million (approximately INR 170 crore) in debt funding from Neo Asset Management’s Credit Opportunities Fund, according to regulatory filings. This funding is part of a larger $30 million (about INR 255 crore) debt round, with the remaining amount expected to be disbursed soon. The funds will be used for corporate purposes and to meet working capital requirements, as disclosed by sources close to the development.

Despite attempts to reach out for comments, slice has not responded to queries regarding the recent fundraise.

This debt funding comes shortly after Neo Asset Management closed its first Special Credit Opportunities Fund, having raised INR 2,575 crore from high-net-worth individuals (HNIs) and family offices. Neo Asset Management’s credit fund aims to invest in companies that are not triple-A rated but are generating operating profits.

Earlier in the year, slice received approval from the Competition Commission of India (CCI) for

its merger with Guwahati-based North East Small Finance Bank. The fintech startup is now awaiting the National Company Law Tribunal (NCLT) nod for the merger. Upon completion, slice will obtain a banking license, significantly enhancing its financial capabilities and service offerings.

Founded in 2016 by Rajan Bajaj, slice originally operated as a buy now, pay later (BNPL) platform under the name Slicepay. It offered a credit card-esque prepaid payment instrument (PPI) with no annual fees, interest, or late charges. However, in 2022, the Reserve Bank of India (RBI) imposed strict regulations on fintech companies, prohibiting non-banking financial companies (NBFCs) from offering credit on PPI. This regulatory change forced slice to discontinue its original service and pivot its business model.

In response to these regulatory challenges, slice began exploring merger options and ultimately shifted its focus to offering UPI payments, consumer credit, and a prepaid payment banking account through its app. These changes have helped slice remain competitive in the evolving fintech landscape.

Slice’s current valuation stands at $1.5 billion, making it a significant player in the fintech sector. The startup is backed by prominent investors, including Tiger Global, Gunopsy Capital, Blume Ventures, Advent International’s Sunley House Capital, Moore Strategic Ventures, and Anfa.

The strategic funding and impending merger are poised to bolster slice’s market position and expand its service offerings. With a banking license on the horizon, slice aims to enhance its consumer finance services and tap into new market segments. The infusion of funds from Neo Asset Management will provide the necessary capital to support these ambitious growth plans.

As slice navigates the regulatory landscape and expands its service portfolio, its innovative approach and strong investor backing will likely continue to drive its success in the competitive fintech industry. The upcoming approval from the NCLT for the merger with North East Small Finance Bank will be a significant milestone, marking slice’s transition into a comprehensive banking entity.

In summary, the $20 million debt funding from Neo Asset Management marks a crucial step for slice as it aims to scale its operations and solidify its presence in the fintech sector. The merger with North East Small Finance Bank and the anticipated banking license will further strengthen its market position, enabling slice to offer a broader range of financial services to its growing customer base.

Read more Business related news on R9 News
Jhumpa Lahiri

Jhumpa Lahiri

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