Scapia raises $40M funding from Peak XV for travel services

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Scapia, a travel fintech startup, raises $40 million in Series B funding led by Peak XV Partners, with participation from existing investors Elevation Capital, Z47, and 3STATE Capital, co-founded by Binny Bansal. The funding will be used to enhance product offerings, expand the team, and integrate AI-driven solutions to accelerate growth. Founded in 2022 by former Flipkart executive Anil Goteti, Scapia offers co-branded credit cards in collaboration with Federal Bank, primarily targeting Gen Z and millennial travelers. The card provides exclusive rewards, including zero forex markup and unlimited domestic lounge access. In addition to financial services, Scapia operates a travel booking platform for flights, hotels, and local transportation. With this funding, Scapia aims to bridge the gap between the growing travel industry and the untapped credit card market in India. The company’s valuation now stands at approximately $193.5 million.

1. Introduction: Scapia Raises Funding

Scapia raises funding to accelerate its mission of revolutionizing travel finance in India. The fintech-travel startup recently secured $40 million in a Series B round led by Peak XV Partners, with strong backing from Elevation Capital, Z47, and 3STATE Capital. The funding will help expand its product range, hire top talent, and leverage AI to enhance customer experiences.

2. Scapia’s Business Model and Services

2.1. Working Model

Scapia operates at the intersection of fintech and travel, offering co-branded credit cards and a comprehensive travel booking platform. The company collaborates with Federal Bank to issue lifetime-free credit cards tailored for Gen Z and millennials, offering travel-centric benefits.

2.2. Revenue Model

Scapia generates revenue through three primary sources:

1. Interchange Fees: Earned from transactions made using the credit card.
2. Interest on EMIs: Users can convert large travel expenses into EMIs.
3. Partner Commissions: Commissions from airlines, hotels, and travel service providers when bookings are made via the Scapia platform.

3. Scapia’s Growth and Expansion Strategy

3.1. Background and Founders

Founded in 2022 by Anil Goteti, a former Flipkart senior vice president, Scapia was created to address the growing demand for travel financing options among young Indian travelers. Goteti brings extensive experience in fintech and e-commerce, positioning the company for rapid expansion.

3.2. Key Services Offered

• Co-branded Credit Card: Lifetime-free credit card with rewards such as 10% cashback on purchases and 20% on travel bookings via Scapia.
• Zero Forex Markup: Travelers can use the card internationally without extra charges.
• Unlimited Lounge Access: Cardholders enjoy complimentary access to domestic airport lounges.
• Travel Booking Platform: Enables users to book flights, hotels, and transportation.

4. Details of the Funding Round

4.1. Investment Breakdown

According to regulatory filings, Scapia has raised Rs 289 crore ($34 million) so far, with the remaining funds expected soon. The investment breakdown includes:

• Peak XV Partners: Rs 218 crore ($25.6 million)
• Elevation Capital: Rs 62.28 crore ($7.3 million)
• 3STATE Capital: Rs 8.65 crore ($1.02 million)

4.2. Valuation and ESOP Expansion

Scapia’s post-money valuation now stands at Rs 1,645 crore ($193.5 million). The company also expanded its ESOP pool by 3,460 options, valued at Rs 22 crore, bringing the total ESOP pool to Rs 132 crore ($15.5 million).

5. Competitive Landscape

Scapia faces competition from established players in the fintech and travel finance sectors, including:

1. One Card: Generated Rs 1,425 crore in revenue.
2. Zolve: Achieved Rs 67.8 crore in revenue for FY24.

6. Future Plans and AI Integration

Scapia plans to use the funding to:

1. Enhance AI capabilities to improve customer experience.
2. Expand its team to drive operational efficiency.
3. Broaden product offerings by integrating more financial and travel-related services.

7. Learning for Startups and Entrepreneurs

7.1. The Power of Niche Markets

Scapia’s success highlights the potential of combining two high-growth industries: fintech and travel. Startups should identify unique market gaps and build tailored solutions.

7.2. Leveraging Strategic Partnerships

By partnering with Federal Bank and Visa, Scapia ensured strong financial backing and credibility. Startups should seek strategic collaborations for faster growth.

7.3. The Role of AI in Fintech

AI-driven financial services enhance user experience and security. Entrepreneurs should explore AI to optimize business processes and customer interactions.

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