Karta raises $15 million for WhatsApp-managed credit cards
The Miami startup says it will use new equity and debt funding to offer U.S.-issued credit cards to international clients of partner firms.
By Sofia Marchetti · World Affairs Correspondent
3 min read
Karta has raised $15 million in Series A funding and secured a $125 million debt facility to expand a U.S.-issued credit card aimed at international travelers, Fortune reported. The Miami startup is targeting a narrow but lucrative market: non-U.S. clients who keep assets with American banks and brokerages and want dollar-based spending power while abroad.
According to Fortune, Galaxy Ventures led the equity round. Illuminate joined as a new investor, while Canary and Clocktower Ventures, both existing backers, also took part. Karta said the debt facility comes from CIM, an investment firm focused on credit facilities.
Karta was founded by Freddy Juez and Orlando Espinoza, whom Fortune described as serial entrepreneurs. The company works through partner institutions rather than selling directly to consumers, offering the card to clients of private banks and wealth managers.
How the card works
Fortune reported that eligible users live outside the U.S. but hold money with an American bank or brokerage. They apply through a partner institution and may receive approval within minutes, without a Social Security number or Individual Taxpayer Identification Number.
After approval, clients receive a U.S.-issued Karta card with a credit line of up to $200,000, according to Fortune. A virtual card can be used right away, and a physical Visa card follows later.
Karta’s service model relies heavily on WhatsApp. Fortune reported that customers can use a 24-hour WhatsApp chat for account alerts, disputes and concierge requests. The card also includes premium Visa benefits such as no foreign exchange fees, rewards points and access to some invitation-only events.
American Express retreat opened the door
The startup is stepping into a gap left by American Express, Fortune reported. American Express had long served this customer group through its International Dollar Card program, which allowed non-U.S. clients with assets in American financial institutions to spend in dollars while traveling.
As American Express began pulling back from parts of that dollar-card business, private banks and wealth managers sought another product for high-end international clients, according to Fortune. Juez told Fortune that firms began approaching Karta as they looked for a replacement.
Fortune reported that Karta initially expected to sign only a limited number of institutions in its first years. Demand exceeded those expectations as financial firms looked to maintain access to a dollar-denominated card product for clients who travel frequently.
Karta now works with about 85 private banks and wealth managers, according to Fortune. Its partners include Itaú, Raymond James and XP International US, among other institutions.
Juez told Fortune that most startup card products have focused on debit, while Karta is trying to offer unsecured credit cards at a global scale. The new financing gives the company more room to support that model through partner banks and wealth managers serving international customers.
This story draws on original reporting from Fortune.