X1 Card Raises $12 Million In Funding Round Led By Spark Capital

Silicon Valley credit card startup X1 raised $12 million in a funding round led by Spark Capital, a backer of Twitter, Plaid, Slack and Affirm. The round also had participation from Jared Leto and CEOs of known tech brands.

X1 Co-Founder and CEO Deepak Rao said in a Thursday (Jan. 14) press release that the company has received a positive response to the credit card’s debut, with almost 300,000 users signing up for the waiting list. The card’s waitlist opened in September and is tracking to be the biggest waiting list for a FinTech product, according to the release.

Co-founded by Rao and fellow Twitter alum Siddharth Batra, the startup calls its product the “smartest credit card ever built.” The company said it “reimagines the credit card,” from how it looks to how credit limits are assigned. 

The company extends what it calls “smart credit limits” to users based on current and future income instead of credit scores. As a result, people often get credit limits up to 5 times higher, according to the press release.

X1’s physical cards are created using 17 grams of stainless steel and laser etching technology, and cardholders can create virtual cards for one-time use. Using “proprietary smart technology,” cardholders can cancel subscription payments in one click, automatically end free trials, and shop anonymously.

Having partnered with Visa, X1 said it offers one of the highest reward structures in the industry and doesn’t charge annual fees.

Tech CEOs participating in the funding round included Aaron Levie of Box; Jeremy Stoppelman of Yelp; Max Levchin of Affirm and co-founder of PayPal; and Ali Rowghani of Y Combinator Continuity.

Ash Gupta, former president and chief risk officer at American Express, is joining X1 as an advisor.

Consumer borrowing dropped 19.6 percent in June, the fastest spiral since 1943, but as banks tightened lending standards, credit has become harder to obtain.