Money has been pouring in for millennials-focused instant credit provider Slice as the company continues to raise compulsorily convertible debt in the last couple of weeks.
The fintech startup, which allows college students to buy collateral-free products and services online on EMI through an app, has garnered interest from both traditional finance companies and new-age fintech service provider alike.
Slice has raised around Rs 10 crores from five different investors in the last two weeks. According to regulatory filings, the company has allotted a total 9,70,538 non-cumulative compulsorily convertible debentures(CCDs) priced at Rs 100 each, in two different tranches earlier this month.
As per the fillings, Japanese investor Shinji Kimura led DAS Capital invested Rs 7.1 crores and picked 710,600 CCDs via its Singapore arm. Early-stage fintech fund EMVC’s founder Mellisa Frakman also picked 142,120 CCDs worth Rs 1.42 crore in a personal capacity. German asset management firm Al Trust also picked CCDs worth Rs 56.5 Lakhs.
It’s worth noting that SlicePay has recently rebranded as Slice.
Interestingly, Slice also received investment worth Rs 40 lakhs from Kunal Shah’s QED Innovation Labs. Shah’s credit card payment service CRED can have possible synergies with Slice, as the latter issues its virtual credit cards to customers.
The company also allotted debentures worth Rs 21.3 lakhs to angel investor Shubhrendu Chandrashekar Khoche, who has previously served as Vice President at credit card network Matercard and now heads product at UAE based Fintech Startup Finablr.
Issuing convertible debt has been on the foreground of Slice’s fundraising strategy. The company had recently raised Rs 20.5 crore convertible debt from Japan-based Gunosy Capital and Pegasus Wings Group.
All of these CCDs were issued with a nominal coupon rate of 0.001%. Importantly, most of these CCDs are slated to be converted into shares within the next three years with a quoted post-money valuation of Rs 341 crores.
For Slice, the use of convertible debt goes beyond just fundraising. As per a subscription agreement dated August 1, 2016, the company had picked up a loan book worth Rs 10 crores from CRIDS, the company that runs microfinance company Chaitanya Finance and is now owned by Sachin Bansal.
In return, Slice had allotted 8,787 debentures to CRIDS which were later converted into equity shares after the loan book was transferred. Bansal’s CRID held around 9.82% stake in the fintech at the start of FY20.
Entrackr‘s query to Slice CEO Rajan Bajaj did not elicit any immediate response. We will update the post as and when he responds.