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Mastercard bets on startups in AI, big data, financial inclusion and payments

Tarush Bhalla
posted on 9th August 2018
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Rajeev Kumar, Senior Vice President, Market Development, South Asia, Mastercard, says the Mastercard startup programme brings together innovators and startups to build the future of commerce.

Powering one of the biggest payment networks across the world, global payments major Mastercard understands the pace of disruption. That’s why Mastercard started Start Path, its startup programme, in early 2014 to support, provide commercial access to, and strategically invest in financial services and commerce startups.

In November last year, the Start Path team was evaluating close to 1,600 startups per year and engaging with more than 150 globally. Last year, Mastercard also actively started scouting for more innovative technologies in the areas of Blockchain, digital identity and healthcare fintechs.

At a time when accelerators and incubators are working with early-stage startups, some still in the idea stage, Start Path is actively seeking startups with at least seed or Series-A funding.

And that seems to have worked. The programme has curated a niche group of startups, including Tiger-backed Razorpay, Bhavin Turakhia’s Zeta, Sequoia-backed Happay, and ToneTag, which is backed by Amazon and Mastercard.

YourStory caught up with Rajeev Kumar, Senior Vice President, Market Development, South Asia, Mastercard, who spoke about the six-month virtual programme, which includes two strong weeks of execution.

Rajeev Kumar, Senior Vice President, Market Development, South Asia, Mastercard

YourStory: Could you explain the Mastercard Start Path programme? 

Rajeev Kumar: Mastercard Start Path brings together a global network of innovators, including banks, merchants, and startups to launch collaborations and build the future of commerce together. The six-month virtual mentorship programme essentially accepts applications from later-stage tech and fintech startups that have raised a significant seed or Series-A round of investment. The reason behind this is to help these startups scale by leveraging a customised combination of Mastercard’s technology, solutions expertise, and mentorship.

Startups are also allowed to leverage our global network while accelerating commercial products and solutions. During the programme, startups also work on a tailored plan that provides them with operational, product, and technology expertise.

YS: What are the areas you are opening this challenge to, apart from payments?

RK: These companies cover a diverse set of areas, including artificial intelligence, big data, wearables, logistics, security, financial inclusion and, of course, payments.

YS: Startups get to leverage your global network, but what does this programme offer Mastercard?

RK: Well, Start Path does bring benefits to Mastercard in a few areas. First, Mastercard is a potential customer or commercial partner of these selected startups that have solutions that align with our strategic priorities.

Second, Start Path companies help Mastercard add value to our global partners and customers who are actively seeking these types of cutting-edge technologies and capabilities.

Last, by enabling startups to build and innovate on top of existing solutions or assets, we can continue our tradition of being an integral part of the broader commerce space.

YS: Do you also take equity from these startups like other accelerators? You seem to have invested in some of these companies.

RK: On the investment side, we don’t take equity up front. Instead, we take an option to invest at the next funding round. This allows us to first work on a commercial level with each startup before both sides evaluate if an investment relationship makes sense.  However, Start Path reserves the right to invest at the time of the startup’s next investment round, with 12 investments executed to date.

YS: Give us a sense of some joint implementations Mastercard has done with these startups? 

RK: A substantial number of Start Path participants have worked on pilots and commercial engagements with Mastercard.

To give you an example, NetPlusDotCom, one of the companies that joined the programme in April 2016, recently collaborated with Mastercard to design an ecommerce solution for Nigerians; this was to increase their confidence in online shopping. To participate, consumers must pre-authorise their payments to the e-tailer, but payments are not processed until consumers confirm they are happy with the goods after delivery.

YS: What are the criteria you consider while selecting these startups? 

RK: The diversity of Start Path proves how quick the pace of innovation is in so many areas. Providing a range of companies with the resources and introductions they need to scale allows us to enable new ways to design what’s next in payments and commerce, side by side.

YS: What kind of funding have startups raised as a part of the Start Path programme? 

RK: Start Path startups have raised $1.1 billion in funding in the last 18 months. In the coming months, we will continue to ramp up the pilots and commercial engagements as part of the programme.

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