Welcome to Nerif’s weekly newsletter!
This week we had a chat with Sencha Credit’s head of business operations, Rishi Nair to understand how & what the pre-seed stage B2C Fintech startup is solving.
The Elevator Pitch - Straight from Sencha
Sencha is a fintech company that has a card that acts like a debit card but helps you build your credit. We know that it is extremely hard for college students to get their first credit card but building credit is the only way to achieve financial stability in our country. We help anyone build credit—everyone will be accepted as you can only spend what you load onto the card, much like a debit card, but our technology and partnerships help you build credit through these everyday purchases. On top of that, we offer bitcoin and stock rewards to help prepare you for a financially stable future.
The Problem
There are a large number of individuals who have problems getting credit cards, because of no prior credit history, this, in turn, becomes a vicious cycle since they cannot build a credit history.
The Solution
A credit card that has a cap based on the current account balance of the user, thus minimizing the risk, while allowing the user to build their credit history with Sencha.
Validation
Sencha is currently in the process of releasing an alpha and has a waitlist of around 1500 people. They will also be joining the summer cohort of SSC Venture’s accelerator.
Competition & differentiating factors
Capital One
Capital One has no guaranteed approval for credit cards, some amount of credit history is necessary. They also offer no rewards, have low limits and hard credit checks, have security deposits and cards have low approval rates.
Other competitors include Chime, Step, Cleo
Other Questions
How do you plan to retain customers once they have a credit history?
Help people by educating them in finance and how to handle their money, through gamification, also provide incentives like bitcoins and stock rewards on successful transactions.
How do you plan to make money?
The plan to make money is through the transaction costs and the sheer volume of transactions.
Fundraising
Sencha is currently putting together a Pre-Seed Syndicate for securing more banking partnerships, hiring people in the development team, getting the cards in the hands of the waitlist.
Contact
For more information about Sencha, you can contact Rishi @ rn1368@stern.nyu.edu , For feedback about Nerif’s weekly startup discovery newsletter, you can contact me @ akshaj+nerif@cmu.edu .