FinTech startup Deserve announced it has raised $17 million in Series C funding. The company uses machine learning (ML) and alternative data to help 40 million college students and young adults — also known as Generation Z — in the U.S. to achieve financial independence through access to fair credit.
Research by Experian shows that Gen Z accounts for 25 percent of the U.S. population and is projected to comprise 40 percent of consumers by 2020. Data also shows that members of this generation are more likely to pay off their monthly balances and have higher average credit scores than millennials, proving how important financial independence is to Gen Z.
This round was led by a strategic investor, with additional participation from Accel, Aspect Ventures, Pelion Venture Partners, Mission Holdings, Alumni Ventures Group and GDP Venture.
Deserve has already used the funding to launch a new mobile application that allows its cardholders to manage finances, build credit and earn rewards. The app also features a financial literacy section where users can find credit education, videos and blogs to work toward financial independence and success. In addition, the firm is partnering with several companies — including Mastercard, Amazon, T-Mobile, Lemonade, Feather and Wikipedia — to launch a new perks program that gives cardholders access to exclusive offers.
“We are thrilled to introduce our perks program and mobile app in tandem to raising our largest equity round to date. We’re another step closer to fulfilling our mission of expanding access to fair credit to all deserving, yet underserved populations,” said Kalpesh Kapadia, Deserve’s CEO and founder, in a press release.
Kapadia added, “We have spent the last few years building a modern cloud-first infrastructure, powered by machine learning to originate, process and service credit cards, providing Gen Z with the means to achieve financial independence. This strategic investment is clear validation in our vision becoming a reality at scale.”