Scapia Nets $40 Mn From Peak XV, Others To Expand Travel Offerings

Former Flipkart executives’ travel fintech startup Scapia has secured $40 Mn (around INR 342 Cr) in a Series B funding round led by Peak XV Partners, along with participation from existing investors Elevation Capital, Z47 and Binny Bansal’s 3STATE Capital.

The startup plans to use the fresh capital for product development, team expansion and also integrate AI to further propel its growth chart.

Founded in 2022 by Flipkart’s former senior vice president Anil Goleti, Scapia offers co-branded credit cards in partnership with Federal Bank, especially designed for catering to the needs of GenZs and millennials travelers. The co-branded card, which works on the Visa network offers various rewards, including a zero-forex markup and unlimited domestic lounge access, among others.

The startup also has a travel app which allows users to book airline tickets, hotel properties and domestic transport options.

“Millennials and Gen Z are turning travel into a guilt-free, all-pleasure experience, which is setting the stage for rapid growth in the travel industry in India. Scapia is uniquely positioned to fuel this revolution by merging a booming travel market with an untapped credit card market to offer a unique and delightful experience to this customer base,” said Tejeshwi Sharma, managing director at Peak XV.

The development comes nearly a month after the startup reportedly resumed the issuance of its co-branded credit card which was on hold for a year long period.

After raising $23 Mn in its Series A funding round in November 2023, the startup found itself in the middle of a controversy.

The travel-focussed fintech’s customers found that Federal Bank had reduced the credit limit of the co-branded credit card by multiple folds and lashed out at the startup on social media. In some cases the credit card limit was reduced from INR 8 Lakh to just INR 20K. This created an unrest among the users.

There was no intimation from either the bank or Scapia about such cutbacks. One of the users also mentioned that the startup had also stopped issuing co-branded credit cards to new customers.

A few months later, Federal Bank said in an exchange filing that it has stopped the issuance of co-branded credit cards including Federal Scapia to new customers on account of regulatory deficiencies. But the bank continued to serve the existing customers of the co-branded cards.

This was followed by a notification released by Reserve Bank of India (RBI) on March 7 last year which made amendments to the ‘Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022, which stated that the co-branded partner shall not “…advertise/market the co-branded card as its own product…” and “In all marketing/advertising material, the name of the card-issuer shall be clearly shown…” Besides, it also included that the co-branded partner shall not have access to the transaction information of the co-branded credit card.

With the latest investment, the startup has so far raised $72 Mn in total funding since inception. It competes with the likes of OneCard, Fi, Niyo and Jupiter among others who offer co-branded credit cards with zero-forex markup charges.

With its tailor made offerings, the Z47-backed startup is eyeing to capture the Indian market which is projected to have close to 200 Mn credit card holders who are likely to spend INR 26 Lakh Cr in credit card transactions by the financial year 2025-26, a PwC report says.

As per Inc42’s State Of Indian Fintech Report 2024, the lendingtech market in India will become a $1.3 Tn opportunity by 2030 growing at a CAGR of 18%.