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While working for CRP Risk Management Limited, an organization addressing background verification complaints and mainly operating in the bank and insurance space, Rahul Belwalkar realized that the background screening industry in India was relatively underdeveloped as compared to the US market.
The US background screening industry is pegged at about USD 2billion while the Indian counterpart is estimated to be around INR 300 crore.
For Belwalkar, this was an opportunity, an area that needed focus and capital for growth.
In July 2016, he left the CRP’s background screening vertical and its intellectual property to start his entrepreneurial journey via SecUR Credentials.
In an exclusive conversation with Entrepreneur India, Belwalkar, CEO, SecUR talked about his company’s growth strategies, challenges and his plans post the IPO.
Attempt to Hit the Bull’s Eye
For SecUR, the company’s customer base is divided into two sections. First, the bluechip companies mostly operating in the information technology domain and it has partnered with multiple verification companies. With such clients, Belwalkar maintained, the firm has to constantly compete in terms of delivery and pricing.
The second category comprises SMEs, where they actually pie lies. For the past six months, SecUR is selling aggressively to this segment of the industry.
Belwalkar reasoned, “In case of the SMEs, which roughly hire 25 people per year, the cost of failure is too high. Additionally, in a smaller space where everybody knows everything, IP protection is important and you can’t afford to make a mistake.”
But the challenge for SecUR is selling the concept to an SME. Convincing the clients to pay for every candidate they hire is a major barrier, he added.
Meanwhile, the firm has a client base of over 500 companies, including Honda, Go Air and TCS and has presence in more than 15 cities across India.
Present-day tech trends are driving the industry forward. SecUR sees partner companies sharing employee information seamlessly as they have started to realize the importance of data integration. “The handshaking among partners and clients will become more intensive. But, it must be mentioned that information security will more critical,” Belwalkar pointed out.
Additionally, academic verification, which was one of the pain points of the industry, will become a lot simpler with the introduction of National Academic Depository platform.
However, with increasing penetration of internet, clients also expect agencies to do an in-depth screening of the employee, including a social media check and take judgmental calls accordingly. “It gets very tricky and we have to take calls internally whether we should or shouldn’t flag the prospective employee,” he shared.
Road to the Capital Market
SecUR has raised an initial round of funds from an HNIs, but, Belwalker declined to divulge into details. Presently, the company is looking forward to raising about INR 30 crore by diluting about 30 per cent of the company stakes, which the it is planning to invest in marketing and brand building activities.
“Background screening in India is considered as a detective work and somewhere it doesn’t exist at all. I want to bring it to the limelight and sell the concept,” he added.
The company had filed a red herring prospectus (RHP) with the NSE Emerge, an SME trading platform. The IPO was open between November 1 and 3. The proceedings from IPO will be also used as working capital, to purchase Symphony 3.0 software and for business expansion.