Bengaluru-based banking infrastructure startup Spense has raised $2.8 million in a seed funding round to grow its AI-powered banking platform and make credit more accessible in India. The funding round was led by Arkam Ventures, with participation from Razorpay Ventures, GrowthCap Ventures, and Atrium Ventures. Several well-known angel investors also joined the round, including Kunal Shah (CRED), Madhusudhan E (KreditBee), Ravishankar (Active.ai), Suresh Rayasam Venkatasubbaih (LinkedIn), and Sayandeb Banerjee (The Math Company).
This comes after the startup raised $1.85 million in a pre-seed funding round in May 2025, led by GrowthCap Ventures.
Founded in 2022, Spense is working to solve a major problem in India’s banking sector. Many people own valuable financial assets such as fixed deposits or mutual funds but still struggle to get access to formal credit. The startup wants to help banks serve these customers with better technology.
Fresh Funding to Boost Growth and New Products
Spense plans to use the new funding to strengthen its partnerships with banks, improve its technology, and grow its engineering and business teams.
One of the company’s biggest upcoming launches is Credit Line on UPI (CLOU), which aims to make borrowing easier through India’s popular UPI payment system.
The startup will also continue building its AI-powered platform, helping banks make faster and smarter lending decisions without replacing their existing banking systems.
Spense was founded by Pawan Kumar, former Head of Applied Science at Uber India, and Srinivas Krishnamurthy, former Technical Lead at BNP Paribas.
The idea for the company came from a personal experience. Pawan Kumar’s aunt, an IIM Bangalore professor with a stable salary, fixed deposits, and mutual fund investments, was rejected for a credit card by seven different banks. Although the banks had her financial information, they could not properly assess her overall financial strength.
That experience showed the founders that India’s banking system needed better technology to understand customers beyond traditional credit checks.
Helping Banks Unlock the Value of Financial Assets
Spense is building technology that allows banks to offer credit against assets such as fixed deposits, mutual funds, equities, bonds, and invoices.
Today, getting a loan against these assets is often a slow process with paperwork and fixed repayment rules. Spense wants to change this by turning these assets into “programmable collateral.” This means customers can access a reusable credit line instead of taking a one-time loan.
The company’s platform works with banks’ existing core banking systems, card management platforms, and deposit systems. This allows banks to upgrade their lending services without replacing their current infrastructure.
Spense also uses agentic AI to automate tasks like customer onboarding, support, servicing, and collections. Its AI brings together data from different banking systems to create a complete and real-time view of each customer, helping banks make quicker lending decisions.
At the same time, the company says humans remain in control. The AI provides insights and recommendations, but the final decision is always made by banking professionals. This also helps maintain compliance and proper audit records.
Already Working with Seven Major Banks
Even though Spense is still a young startup, it has already built strong partnerships in the banking industry.
The company currently works with seven major banks, including one of India’s largest public sector banks.
Its platform powers more than 200,000 active credit cards and helps issue over 40,000 new cards every month. According to the company, this accounts for nearly 8% of India’s monthly credit card issuance, showing the scale at which its technology is already being used.
Spense has designed its platform to work directly within banks’ existing systems while meeting strict compliance and security requirements.
As digital payments continue to grow across India, the demand for faster and more flexible lending solutions is also increasing. By helping banks use customers’ existing financial assets more effectively and make real-time lending decisions, Spense aims to improve access to formal credit for millions of Indians.
With fresh funding, stronger banking partnerships, and new products like Credit Line on UPI in the pipeline, the Bengaluru-based startup is preparing for its next phase of growth and looking to play a bigger role in the future of India’s banking sector.