Spense, a Bengaluru-based banking infrastructure startup, said on July 1 it raised US$2.8 million in seed funding led by Arkam Ventures, with Razorpay Ventures, GrowthCap Ventures, Atrium Ventures, and several angel investors also participating.

Founded in 2022 by Pawan Kumar and Srinivas Krishnamurthy, Spense builds software that helps banks launch asset-backed credit products such as secured cards and credit lines without replacing their existing technology systems.

The startup said it works with seven banks in India and powers more than 200,000 active cards.

The company said it will use the funding for product development, hiring, banking partnerships, and Credit Line on UPI.

The Reserve Bank of India enabled the product in 2023 for pre-sanctioned bank credit lines on the Unified Payments Interface network, allowing consumers to pay merchants from an approved limit through UPI apps.

In India, secured cards are typically backed by fixed deposits, which helps banks manage risk while extending credit to customers with limited credit histories.

Karnataka Bank has already launched Credit Line on UPI for retail users, while providers including CARD91 offer systems that help banks launch similar products.

Any fintech-led lending flow will also need to comply with Reserve Bank of India digital lending rules on borrower documentation.

🔗 Source: Spense