For many college students, there’s a Catch-22 when it comes to their finances: They can’t get a credit card or student loan because they have no credit history. But they have no credit history because they can’t get a credit card or student loan – or at least, not a good one.
This dilemma is all too familiar to Kalpesh Kapadia, CEO and founder of Silicon Valley-based startup Deserve — which today announces a $17 million round of funding led by lending mega-giant Sallie Mae, with participation from early Facebook investor Accel as well as Pelion, Aspect Ventures, and Mission Holdings.
When Kapadia came to the US from India for college, he was turned down again and again when applying for credit cards and student loans.
“I got rejected every time,” Kapadia said. “It was mostly for credit cards and student loans, given that I didn’t have a credit card history in the country.”
Despite the decent amount of credit history he had racked up in countries like India and Singapore, American credit companies still failed to recognize his financial credibility, said Kapadia.
“Everything works around building good credit history,” said Kapadia. “Building good credit is a weapon, it’s a tool that can advance your entire life.”
To that end, Kapadia has built his own company, Deserve, to solve what he considers to be one of the most problematic financial issues for young people today.
Deserve’s credit card is created with Generation Z in mind.