Since rolling out in beta to a very limited waitlist in October, X1 is touting to have become the fastest growing challenger credit card of all time, on track to see $1 billion in annualized spend this year with a transaction happening every five seconds.
Relying on current and future income expectations over credit scores, the X1 Card is described by the company to better set smart credit limits up to higher than traditional credit cards.
The startup recently raised $25 million in Series B funding, with applications for the credit card promised to open to the general public in the U.S. soon. Led by Google Analytics cofounder Wesley Chan’s new fund, FPV Ventures, the round included investments from a number of famous investors—including a popular musical group.
Alex Pall and Drew Taggart, the musical artists behind electronic duo The Chainsmokers, recently shared more with Fortune about their decision to invest in the company.
- Startup: X1
- Location: San Francisco
- Year founded: 2020
- Valuation: Declined to disclose
- Investment level: Series B
- Number of employees: 30
- Other major investors: FPV Ventures, Spark Capital, SV Angel, Affirm and PayPal co-founder Max Levchin, PayPal founding chief operating officer David Sacks, former Twitter chief operating officer Adam Bain, Instagram head of product Kevin Weil, Box CEO Aaron Levie, Yelp CEO Jeremy Stoppelman, Y Combinator Continuity CEO Ali Rowghani, and former American Express president Ash Gupta
Why they invested, in their own words
Through our venture firm Mantis VC, we are always looking for the next disruptive brand in fintech, and credit cards were overdue for a makeover. We always think about our fanbase and the types of businesses that would improve their lives, and X1 felt like the perfect opportunity to do that. There also just hasn’t been a lot of innovation in the space since the American Express’s Platinum Card launched in 1984.
With X1 Card, it was love at first sight. The branding—from the unboxing to the card to the app—is eye-catching and stunningly sleek. We also are founder driven investors, and Deepak checked all the boxes for us given his passion and excitement for the business.
When you use the card, the experience continues to feel like magic; we were shocked once we began speaking with X1 how many friends of ours already had the card. The rewards are unparalleled in the no-fee card industry, and the app makes it simple and easy to redeem points at the places our fans love to shop at like Apple, Nike, Amazon, Supreme, Peloton, Uber, and more. A slew of smart features take care of anything you could ever think of, like canceling trials, disputing purchases, creating new cards for family members, and more. The card rethinks how limits are set by looking at income instead, which allows limits to be up to five times higher.
We know there are inherent risks, and this won’t be easy, but we are excited to see how X1 can change the landscape of credit. Not to mention their waitlist of more than 500,000 people are in line for the card today. Given where they are at and how little marketing has been done, this is beyond impressive. X1 Card’s momentum is something we haven’t seen before.
This is an installment of Why I Invested, a series featuring famous investors from all different backgrounds and industries, revealing what inspired them to invest their own money in a new business.
