WeRize, India’s first socially distributed full-stack financial services platform for small cities, said it expects to achieve $200 million in annualised revenue run rate by 2025. The firm which has 500,000 customers aims to on-board 2 million customers in the next three years and grow its presence to over 4,000 small cities across the country.
The two-and-a-half-year-old platform which offers savings, lending and insurance products, said it aims to become the leading financial services company for small cities in India. The firm which is backed by marquee investors such as Kalaari, 3one4, Orios and Picus is already operationally profitable and has a gross revenue annualised run-rate of $6.5 million. The company is all set to achieve EBITDA profitability by the end of this year and is growing at 15 per cent month on month, quadrupling every year.
“From the start, our focus was on building a profitable and sustainable business that will add value to the lives of people in small cities,” said Vishal Chopra, co-founder, WeRize. “We have achieved operational profitability within the first two years of our launch and hope to be fully profitable in 2022 despite rapid growth. This is a result of us identifying a huge white space in the market, creating unique products that serve the needs of small city customers and using a super low cost and scalable freelancer distribution.”
Interestingly, while most fin-techs offering loans are saddled with defaults, WeRize said its loan defaults are less than 0.5 per cent (to the tune of a few lakhs in the last two years), something which is unheard of in this space. The company credits this to its product design and its machine learning engine which uses insights from 1 billion-plus data points gathered from over 500,000 customers from the platform, for risk management and product development. When a customer applies for any financial product today, WeRize gets close to 5000 data points per family that helps the company evaluate the risks involved.
WeRize said it is solving the challenges that customers in small cities of India face when it comes to accessing financial services like savings, lending and insurance. The company's customers include salaried employees like teachers, accountants, FMCG distribution teams and junior PSU employees– who earn Rs 15,000-30,000 in a month. One of the biggest challenges that this segment (almost 50 to 60 crore people across India including earners and family members) faces is their inability to get loans, credit cards, insurance products as most major banks do not serve this customer base given their low Lifetime Value.
This is where WeRize is looking to make a dent. As a full-stack provider, WeRize manufactures, develops and distributes a portfolio of credit, group insurance, and savings which are customized as per the requirements of customers in smaller cities. Using its proprietary “Social Shopify of Finance” tech platform, WeRize said it has enabled thousands of financially literate and digitally savvy freelancers to sell its financial products in their social circle; solving the need for high-touch in these geographies and reducing their marketing costs substantially. While several other companies such as LIC have used freelancers to sell financial services, WeRize is the only Indian platform that has been able to build freelancer distribution without any of its own employees on the ground to manage these freelancers. Typically companies like LIC have their own field and branch teams to acquire, train and manage these freelancers. This makes this model extremely capital intensive. However, WeRize is able to manage over 10,000 such freelancers across 1000 cities in India with only their technology and data science platform and hence save big. This results in an extremely cost-efficient and scalable distribution model.
“We are currently at a gross-revenue annualised run-rate of $6.5 million with almost 15 per cent month-on-month growth . We aim to touch $200 million in (annualised revenue) run-rate by 2025 and become the leading financial services company for small cities in India,” said Chopra. “Through our social Shopify platform, we are also confident of creating thousands of freelancer employment opportunities across India’s small cities.”
WeRize collects close to 5,000 variables per family which involve bank statements and utility bill payments, from the customers, basis which, it assesses the risk involved before designing a financial product for the potential customer. WeRize is targeting cities like Ludhiana, Sonipat from North, Surat from Gujarat and Salem from Tamil Nadu. There are 750 such districts in the country and this is the most lucrative financial services opportunity in India right now with close to 30-40 per cent of India’s GDP coming from these small cities.
Also, WeRize’s ‘Social Shopify of Finance’ platform enables its fleet of freelancers and social partners to engage with potential customers in these small cities, suggest relevant products and get them on board. These freelancers also promote its products in their social circle via social media channels like WhatsApp or Facebook.
The data or insights collected from the potential customers through its freelancers allows WeRize to build unique products and distribute them through its own channel. The unique channel allows the company to acquire customers without spending much on marketing thus enabling it to achieve greater profitability.
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