Karbon Cards| Corporates Cards for Indians | Uses, Advantages, Benefits
- 4 April 2020 | 2800 Views | By Abhinav Mishra
Startups are growing in India at a very fast pace, a few of them are turning into unicorns. They also at times struggle with a few things and a possible area where startups are struggling much is the lack of banks offering corporate cards. Corporate cards are important for the smooth functioning of the company.
Corporate credit cards are cards issued to employees of usually big companies who let them charge their authorized business expenses such as plane tickets and hotel stays. Startups struggle to avail corporate cards because banks seek a 110 percent deposit guarantee, a lot of documentation, a lot of time and a personal guarantee from the founders.
When there is a problem in any system, a startup comes up to solve it. This problem is addressed by KarbonCard, a fintech startup based out of Shanghai and Bengaluru which was founded in 2019. The company provides corporate cards to startups.
There USP is that they offer corporate cards to startups without any fixed deposits and personal guarantees and have a system in place which takes less than 5 minutes to submit application. The company is founded by Chinese VC Pei-fu Hsieh and Amit Jangir. Pei earlier worked with US-based VC fund Kleiner Perkins and Chinese fund 01VC. He has also worked with McKinsey and has built many ventures from scratch and managed them at Rocket Internet. While Sunil Sinha brings decades of experience in the fintech industry and manages KarbonCard’s card issuance, credit policy, and customer services.
How does Karbon Card work?
The company is less than a year old and hence the company provides its customers every possible facility and benefits, one can think of. They don’t charge any kind of fee to the companies. Even the card that Karbon provides to the employees of its customer’s startup companies is free of cost. The rewards across platforms like Segment and Hubspot are completely free. How do they make money then? Like most credit card companies, their revenue comes by taking a cut of MDR when the card is swiped at any merchant.
Based on the financial health of the startup, Karbon decides the credit limit to be offered to the employees of startups. In case the financial health changes over time, the startup can put in a request to increase the credit limit. Unlike traditional credit cards, you only get 5 business days to pay your credit card bill upon receiving the statement. You will have to pay in full, there is no concept of ‘Minimum Due Amount’ since they are offering an interest-free credit card. The billing is done monthly. The payment can be made by transferring the funds to the designated bank account.
In case you miss your payment due date, Karbon has the right to cancel your card. Though you can still make payment after the due date and continue using the card. In case you don’t pay the dues over a period, the Karbon Cards will take necessary legal action against the startup which will surely destroy the reputation of the company in the startup world.
In the first two months, they are able to get over 100+ startups registered with them. Though they have competition with big banks like Citibank, HDFC, etc but the good part is that the traditional banks are not much interested in serving the startup.
How to apply for Karbon Card?
As mentioned before, only funded startups are eligible for the Karbon cards. You can signup using below link – https://www.karboncard.com/user/send-register-email
You will be asked to verify your email. On clicking the verification link, you will be directed to a page where you will have to create your account by providing your name, phone, and password.
The second section of the form will collect your company details like company name, website, funding status, industry, the total number of employees.
On the next page, you will be asked to upload your KYC documents and your startup company’s bank statement. If you qualify you will receive your virtual Karbon Card in 24 hours.
What are the Advantages of Karbon Cards?
Credit: As we already mentioned, they don’t take any personal guarantee of the founders or ask for fixed deposits, startups can qualify for the cards from the Karbon. This ensures startups have cash flow. The only eligibility is that the startup should be funded and should have more than 25 lakhs in cash.
Rewards: They offer rewards at the usage of credit cards like any other credit card provider but they have a reward system in place which is specific to the startup environment such as rewards given when using cards on platforms like MakeMyTrip, Uber and other SaaS product companies like Hubspot, Freshworks, etc.
The reporting tool: They offer an intelligent expense management tool to the founders/owners. The tool helps them understand where the employees are spending. The employees can reconcile the expense report and get reimbursements in very little time.
Limit: The banks are very rarely offering corporate cards to startups. Even when they are, the credit limit is very less. In most cases, it does not serve the purpose. Karbon is offering a 10X higher credit limit as compared to banks which make the life of startups a lot easy.
What Rewards does Karbon offer?
For personal credit cards, we are often attracted by the welcome offer that the banks offer. Karbon knows that- this is what attracts even the companies. For the same reason, the company offers rewards worth $50,000 upon signup.
The best part is that the rewards are specific to startups, such as AWS Activate, discounts from MakeMyTrip, Uber, WeWork, and many other Saas products (Hubspot, Segment, Freshworks, etc.
Since they have just started, they are taking feedback from the customers and have a system in place to understand their needs and based on that they keep adding more rewards.
Why is Karbon Rewards the best rewards program for startups?
The best thing about their reward system is that unlike traditional credit card, where you need to convert your rewards points to use them, Karbon cards works without points conversion. Users can login to their personal account and redeem the reward points with a few clicks.
Other than providing credit cards to startups, they have another vertical. VC Connect is India’s first platform that connects startups with venture capital firms in China and India. Startups can register on the platform and if any VC finds the startup interesting, they will be contacted. The best part is that the platform is completely free to use. The VC Connect platform is reserved only for Karbon Card users.
The company has raised US$2 million in seed funding, led by angel investors from China and India. The funding round was backed by a number of angel investors, including the likes of Amrish Rai (Ex PayU), Kunal Shah (Cred), Jitendra Gupta (Jupiter) and few others. They will use the fresh funding for better handling of operations, product development, and market expansion.
Amit Jangir, in a recent interview, said “The journey to building Karbon Card has been dotted by many ups and downs, as is the case with most startups. However, our greatest moment of pride was when we observed that the majority of our early customers have begun to refer and unequivocally praise the Karbon Card to other startups. This validation along with the continued support from hundreds of other startups such as Cred, Jumbotail, MyGate, among others have been incredibly encouraging to our team, assuring us that we are on the right track.”
Credit card is a growing industry as per Reserve Bank of India report, the number of credit card users in India has increased to 48.9 million in May 2019 as compared to 38.6 million users in May 2018. A massive 27% growth in business opportunities!! The company vision is to make sure startups achieve more by using Karbon Card. They are coming with some exciting products in the future which will help startups save money and increase their efficiency.