BankBazaar Aims to Break Even Soon Basis Fresh Funding of INR 45 Cr in Ongoing Series D Round The latest funding is led by new investor WSV with particpation from company's existing investors, including Amazon, Sequoia India, Experian, and Eight Roads
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Online financial services marketplace BankBazaar has raised INR 45 crore as part of its ongoing series D funding round. The latest funding is led by new investor WSV—a joint venture fund of Walden International and Korean company SKTA—with participation from a clutch of company's existing investors, including Amazon, Sequoia India, Experian, and Eight Roads.
As per a report published in April by digital media platform Entrackr, Bankbazaar had raised INR 29 crore from Amazon and other investors "The D1 round was done in multiple tranches and the latest capital infusion is the first official announcement from the company," Adhil Shetty, CEO, Bankbazaar told Entrepreneur India.
Founded in 2008 by Adhil along with his brother Arjun Shetty and Rati Shetty, Arjun's wife, Bankbazaar is an online marketplace for retail loans, credit cards and investment products like mutual funds, fixed deposits etc. It also provides customers their credit score for free. Over 50 financial institutions have collaborated with the company to sell their products.
Bankbazaar plans to deploy the fresh capital for accelerating the delivery of its contactless personal finance products and business expansion in India. "In the post-COVID-19 world, the demand for contactless finance is going to grow exponentially, and this round of funding will help us accelerate our plans to implement contactless access to credit," Shetty said in a company statement.
The Chennai-based startup had last raised INR 191 crore in October 2017 from Experian.
Digital Access to Credit Expected to Bounce Back Soon
Bankbazaar claims that between October 2019 and February 2020, it saw a 90 per cent increase in monthly organic traffic and a 53 per cent increase in monthly revenue. Shetty is confident that these numbers are only going to go up in the coming months due to the increase in demand for digital financial products brought about by Covid-19.
"We've seen that in the two months of lockdown (April and May) more progress was made on contactless, no meeting, no paper, delivery of loans and credit cards than in the two quarters before that," he told Entrepreneur India. "Bank CEOs I've spoken to are telling a similar story. Pre-COVID probably 30 per cent of their business was digital and 70 per cent was offline, but they think that by the end of this year this ratio is going to be the mirror opposite."
On being asked whether massive layoffs, paycuts and the overall grim job market will impact retail borrowing, Shetty says that loan amount will definitely fall but they expect an increase in digital transaction volume. "Say, if last year loans worth INR 100 were disbursed, only about 30 per cent was happening through digital mediums like Bankbazaar. Whereas this year, while the loan amount might fall, to say INR 70, but the percentage share of it disbursed digitally would be much higher. So, for us this shift to digital access to credit will balance out fall in loan demand," he explains.
The company statement said that prior the countrywide lockdown announced by the government to combat spread of coronavirus, it was treading to achieve operational month-on-month profitability in March 2020. "The shutdown was a reset button for us but we are confident that given that May was better than April so basis this fundraise we will get back to EBIDTA break-even on a month on month basis very quickly," says Shetty.
"Fintech is a not a sunset industry and digital credit or digital access to credit is going to bounce back much faster than offline. This industry is going to grow this year," he adds.
Bankbazaar was able to cut down its cost by 15 per cent between October 2019 and March 2020, as per its statement, adding that its registered customer base increased to 40 million during the same period.
With the latest round of funding, the company's total external funding raised across several rounds stands at $116 million.