“The platform combines advanced analytics, AI and Machine Learning techniques”- Mr. Vineet Sukumar Founder and MD, Vivriti Capital
What is the thought behind Vivriti Capital? How was the idea of Vivriti Capital conceived and implemented?
Having worked for over a decade in the structured finance space in India, we (Founders) figured out that the debt market in India had two major shortcomings that needed to be addressed to achieve scale- information asymmetry and opaqueness in price discovery. Vivriti (which means progress ) was founded with the sole purpose of disrupting this industry by leveraging technology as an enabler in solving this and linking originators and investors in the most efficient manner. The key objective of the platform is to create scale, address information asymmetry, enable transparent price discovery that has hindered the growth of a robust debt capital market in India. We believe this in turn would help evolve the space such that it addresses the financing need of originators across sectors, sizes and rating spectrum. It has been our firm belief that technology is fundamental to creating this as it solves for inherent inefficiencies of the current structures. At Vivriti, we wanted to strike the right balance between “fin” and “tech”- while the experience and understanding of the founding team has ensured that we are market leader in the innovative structured finance space-we believe that the scale disruption which we envisage cannot be a factor of the number and complexity of products- that’s where the “tech” takes over. We founded Vivriti with the sole purpose of disrupting this industry by leveraging technology as an enabler in solving this and linking originators and investors in the most efficient manner. The Marketplace as it was envisaged, consolidates all fragmented pieces of market information and clubs it with best in the industry execution capability.
We started out as 10-member organisation in June 2017. The initial team comprising co-founders and the founding members have worked together for over a decade in their previous organisation. The initial group largely comprised of ex-colleagues ,on the technology side- which has always been the focus we had started recruitment right from the time of inception and we soon had a core technology group in place. In the first few months we had people joining us from large organisations who were intrigued by the ideas we presented and wanted to be a part of the journey. We have hired from diverse backgrounds- banks, rating agencies, Mutual Funds DFIs etc. For us a critical criterion for selection is the zeal exhibited to take up something extremely challenging and work with the mindset of an “entrepreneur”.
Vivriti Business Model:
Marketplace:
At the core of the Vivriti offering is the marketplace- a comprehensive online credit engine and transaction platform that solves for the missing pieces and limitations of the conventional model. The platform enables issuers access a wide range of investors and helps them meet their debt requirement across their lifecycle. The Investors can choose deals and issuers as per their requirements and selection criteria.
The platform combines advanced analytics, AI and Machine Learning techniques to create unmatched user experience and efficiencies. The platform has been built from scratch by our in-house team comprising data engineers, full stack developers, UI/UX experts. A team of data scientist has put together the analytics piece for transaction and client module. It includes advanced predictive analysis, statistical models, credit scoring models, recommendation engines, customizable user dashboards. The platform has created huge operational efficiencies that reduce the TAT for each transaction. The execution timelines have been reduced by almost 60%. The platform has 6 live products – Securitisation (Direct Assignments, PTC), CP, CD, NCD and Term Loans with more products lined up for launch.
The design of the platform has been basis a detailed understanding of specific user requirements such that each counterparty experiences a simplified and seamless process.
The platform has two distinct modules- Credit Engine and the Transaction Module.
Credit Engine: This is a comprehensive information and document repository of issuers that can be accessed by investors for forming credit opinion and to get an updated client view. The engine factors in data from multiple sources and translates it into credit score. It is supported by
Transaction Module: It is a digitally enabled transaction platform with automated workflows, auto document generation feature, straight through processing, multi -party framework that significantly reduces the deal execution timelines. It ensured end to end transaction lifecycle management including post settlement monitoring and performance analysis.
In addition, there are customised user dashboards, portfolio monitoring mechanism and risk management features.
The platform is governed by tightly defined access, information sharing and usage rules along with advanced security features.
NBFC: As an NBFC we have been lending directly from our books. Besides financial services, we are expanding into other sectors, 10 as of now. For each new sector, we take a “sector approach” which means we first create a robust credit underwriting and risk framework for each sector before taking an exposure. The approach across is sector view followed by client view.
What is the funding status of the company?
We have till date raised over Rs 320 Crore of equity through Series A round of funding in January 2019 and have mobilised debt of Rs 436 Crores. We are in the midst of our Series B fund raise at the moment and expect to mobilise Rs 450 crores.
What is the Future Outlook of NBFC industry in the crises scenario?
We believe NBFCs with strong fundamentals continue to enjoy market confidence. Sector specific views are ofcouse there. The past few months have seen a significant diversification of the borrowing profile of companies with alternative lending sources such as securitisation getting a major boost.
What are you looking at right now? Or what are your future plans for Vivriti Capital?
We are working on significantly ramping up our technology to support the scale that we envisage. We plan to increase our User base from 1000 to 1,00,000 and our volumes from 15,000 Crores to 1,00,000 Crores by 2024. The team is working on significantly ramping up the credit and risk management module that would enable the platform to achieve the scale envisaged. The focus is on further strengthening the data analytics and enterprise credit engine solutions We also see significant uptake of our standalone offerings such as the Reporting and Analytics Solution. The Team is working on making the platform a plug and play model and enable API integration across parties. We would like to make the platform the one stop solution of debt requirements for institutions in the sense that this helps to not only access but also manage the same internally- an ERP like solution. We are in the midst of a massive recruitment drive to significantly increase the strength of our technology team- will be doubled from 50 to 100 by end of the year.
What all challenges did you face?
The only challenge we faced in the initial phase was in ensuring active adaption of the marketplace. Since this was the first end to end online platform in the enterprise debt finance space , getting users to switch to this mode took some convincing. However, once the users experienced the platform and the convenience and value add it offered, repeat usage and word of mouth publicity followed. This coupled with effective communication strategy helped drive up the adoption numbers.
Please share the revenue details
Our main revenue stream comprises of the arranger fee that we earn from the borrowers (client) for facilitating the deal. We also participate as junior investors/guarantors as required in some of our transactions. As stated above, being a registered NBFC, we also lend directly from our books. We are now working on offering the market place features such as the reporting and analytics solution as stand alone offerings and we are in advanced stage of discussion with a few Banks.
In a course of two years we have facilitated transaction flow of over Rs 18,000 crores through our platform. We also initiated our balance sheet lending and now have a loan book of roughly Rs 1000 Crores.
Profitable entity in less than 1.5 years of operations. Received an ICRA A- rating in our first rating exercise.
