A Silicon Valley startup offering credit cards to young adults with scant borrowing records has raised $12 million in equity funding.

The company, which was previously known as SelfScore, is also rebranding itself as Deserve.

Deserve targets college students and twentysomethings who lack traditional credit scores — often because they have never borrowed money, or because they recently immigrated to the United States.

Kalpesh Kapadia, CEO of Deserve.
Deserve CEO Kalpesh Kapadia said a lack of credit history made it difficult for him to get a credit card when he immigrated to the United States.

“When I immigrated to America in 1995, one of the hardest parts of settling down in a new country was my lack of financial security and independence,” Deserve CEO Kalpesh Kapadia said in a press release Tuesday. “A credit card is one of many tools that was not accessible to me.”

Deserve uses a proprietary algorithm to evaluate a borrower’s creditworthiness. Card applicants provide read-only access to their bank accounts, which allows the Menlo Park, Calif.-based company to analyze their financial health. Those who are approved get an unsecured credit card without relying on a co-signer.

Deserve currently offers two products. One is a credit card aimed at college students that offers 1% cash back on all purchases and an 18-month subscription to Amazon Prime Student. This product has no annual fee and carries a 19.74% annual percentage rate.

The second card is targeted at recent graduates. It also has no annual fee, and offers 1% to 3% cash back. The APR can range from 16.99% to 23.99%. The cards are issued by Celtic Bank, a $620 million-asset institution in Salt Lake City.

The company’s latest financing round was led by the venture capital firm Accel. Other investors include Aspect Ventures, Pelion Ventures, Mission Holdings, Alumni Venture Group and GDP Venture.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.
Kevin Wack

Kevin Wack

Kevin Wack is a California-based reporter for American Banker who covers the U.S. consumer finance industry.