Bengaluru-based fintech infrastructure startup Spense has raised $2.8 million in a seed funding round led by Arkam Ventures, with participation from Razorpay Ventures, GrowthCap Ventures and Atrium Ventures. The company is building infrastructure that helps banks launch secured lending products without having to replace their existing systems.
Founded in 2022 by Pawan Kumar and Srinivas Krishnamurthy, Spense works with banks to offer modern asset-backed credit products such as secured credit cards and credit lines. The startup says it already partners with seven major banks in India and supports more than 2 lakh active cards.
Spense’s bet on secured credit for the next phase of lending
Spense’s core thesis is that the next wave of lending in India will rely less on unsecured risk and more on assets that borrowers already hold. The company is focused on fixed deposits, mutual funds, insurance policies and other financial holdings that can back credit products and reduce recovery risk for lenders.
Its flagship offering, Credit Line on UPI, is designed to make secured credit feel as easy as modern digital payments. Instead of applying for fresh credit each time, customers can access a reusable line through RuPay credit cards, UPI-linked credit and other payment rails, while the underlying exposure remains backed by collateral.
The startup’s view is that small-ticket unsecured lending has become expensive to recover and difficult to scale sustainably. By shifting the risk profile toward secured credit, Spense believes lenders can serve more first-time borrowers while keeping collection costs and credit losses under better control.
Why the startup believes underwriting must change
Spense argues that India’s credit system cannot keep using the same underwriting playbook for the next generation of borrowers. The company believes many people who already have savings or investments with banks remain outside formal credit, even though they could begin with a secured product and gradually build a repayment record.
According to the startup’s thesis, borrowers who demonstrate steady repayment over six to twelve months can later qualify for higher unsecured limits. That makes the asset less important over time and puts more value on the borrower’s credit behaviour, which Spense sees as the real long-term signal.
The company also sees room for this model among homemakers, retirees, informal workers and small business owners who are often missed by traditional credit scoring systems. By creating repayment history through secured credit, Spense aims to help banks expand access without taking the full risk of unsecured lending from day one.
FAQs
- What is Spense?
Spense is a fintech startup that helps banks offer secured credit products like credit cards and credit lines.
- How much funding has Spense raised?
Spense has raised $2.8 million in a seed funding round led by Arkam Ventures, with participation from Razorpay Ventures, GrowthCap Ventures and Atrium Ventures.
- What is secured lending?
Secured lending is credit backed by assets like fixed deposits or mutual funds, making it less risky for lenders.
- What is Credit Line on UPI?
It lets eligible users make UPI payments using a pre-approved credit limit instead of their bank balance.
- Why are banks interested in secured credit?
It lowers lending risk and helps more people access formal credit.
