Cardless, a San Francisco-based fintech startup, has raised $30 million in funding to expand its co-branded credit card platform, which utilizes embedded finance to provide a more efficient and customized experience for brands and consumers alike.

The funding round was led by Activant Capital, with participation from Mischief, Industry Ventures, Thayer Ventures, Assurant, and strategic backer Amex Ventures. While Cardless is not disclosing its current valuation, the company's previous valuation stood at over $350 million when it raised $40 million in 2021.

Cardless's innovative approach to co-branded credit cards has seen significant growth, with revenues increasing five-fold in the last 12 months. The company's platform provides Visa, Mastercard, and American Express card options, and has attracted a range of customers, including Qatar Airways and Alibaba. The latter is using Cardless's platform to offer services to small and medium-sized businesses in the U.S.

What sets Cardless apart from its competitors is its ability to provide a more efficient and customized experience for brands. The platform enables companies to build co-branded cards with tailored rewards and features, which can be set up and onboarded within weeks. This is in stark contrast to traditional co-branded credit card programs, which can take months or even years to develop.

According to Michael Spelfogel, president and co-founder of Cardless, the credit card space is ripe for disruption. "The credit card space is ubiquitous from the consumer angle, but from brands' point of view, it is ripe to be disrupted," he said. With 11 banks currently operating the vast majority of co-branded credit cards in the $77 billion industry, Cardless is well-positioned to capitalize on this opportunity.

The Cardless platform offers a range of features, including the ability to set up card applications within existing apps, integrate card management into those apps, and incorporate rewards and marketing through a dashboard. The platform also includes fraud detection and security, as well as usage analytics to help product managers understand what is working and what is not.

In addition to its core features, Cardless is also exploring additional services, such as lending and buy now, pay later options. The company is also considering the potential to offer tax calculating and other financial tools in the future, particularly given the incoming U.S. administration's plans for new tariffs on goods from certain countries.

Investors are betting big on Cardless's ability to disrupt the co-branded credit card industry. "Co-branded cards are not a derivative of a derivative space, where you end up with a very small potential addressable market…and large legacy folks cannot offer the type of service that Cardless can," said Andrew Steele, who led the round for Activant.

As Cardless continues to grow and expand its platform, the big question will be whether the market is interested in disrupting the status quo enough to make the switch from traditional co-branded credit card programs. With its innovative approach and growing customer base, Cardless is well-positioned to capitalize on this opportunity and revolutionize the $77 billion co-branded credit card industry.