Qbera Aims to Raise its ‘Series A’ Round of Funding By December 2017
Imagine living a life within means and sans borrowing, it would be great indeed. Unfortunately life does not work that way and sometimes has pleasant or not so pleasant surprises in store for you.
Evden though we try hard to save some amount towards emergency funds which rarely happens. When a real emergency hits you hard, the first option that comes in the mind of an individual is using of credit cards.
Credit cards can solve the problem temporarily, but what about high interest rates? On the other hand traditional unsecured loans follow a strict documentation procedure due to obvious reasons. When you are dealing with an unexpected contingency like a medical emergency or something that needs to be paid in one or two days, you may not be in a position to run behind loan agents/managers.
This has led to rise of fintech companies such as Qbera, who are bridging the gap by helping individuals to get quick emergency loans when required within 24 hours. Qbera was started in January 2016 with the mission of serving underbanked individuals with access to credit.
BWDisrupt interacted with Aditya Kumar, Founder & CEO, Qbera to know more about their vision for their fintech startup & how the sector is evolving.
Edited Excerpts-
Tell us about you journey with Qbera & how did it start?
I decided to start by focusing on the salaried segment for two reasons: first, availability of reliable data was high - meaning that technology could be used to automate a significant portion of the origination, bringing costs down and ultimately enabling better credit decisions to be made. Second, banks and NBFCs alike focused on a very small segment of the market - namely employees working for what they consider to be “Category A+, A, and B” companies - totalling employees of a total 10,000 employers in the country, as well as individuals earning more than 6 lakhs per annum.
Once the segment had been decided, I began recruiting the key team members that would be required to put together the requisite risk & analytics frameworks for the business. One of the first things the team did was identify a universe of 700,000 companies – employees of which we were, prima facie, happy to consider for personal loans.
I also was fortunate to find a prospective technology partner, Lendfoundry, who had vast experience in building proven loan origination & loan management system for very large fintech companies in the US. Once the core team, as well as the Lendfoundry partnership was in place, we started development on the assessment frameworks, technology, as well as engaging prospective providers of balance sheet capital.
How difficult it is to set yourself apart & build a Fintech startup in the country?
One of the first approaches we made was to RBL Bank, who were actively looking to partner with financial technology startups. We were extremely fortunate to close the partnership with RBL which gave us a significant amount of flexibility in choosing the segments which we wished to lend to (which had been historically underserved), with minimum capital contribution from our side. This was essential for us to be able to test our models, as well as scale our business while being capital efficient.
With the core team, technology partnership and banking relationship in place, we began to recruit members of the team that would be required to source business (potential borrowers - both online and offline), as well as manage the operations. Once all of these were in place, the first version of the technology was ready and a basic sourcing strategy had been formed, we started booking business. Our first loan was booked almost exactly one year from inception, in January, 2017.
Since the end of January, Qbera have evaluated applications from nearly 20,000 prospective borrowers and funded more than 5 crores of loans. The company has seen almost 50% month-on-month growth, and expecting to disburse more than 12 crores of loans in the upcoming quarter.
What sets Qbera apart is its focus on customers who earn less than 6 lakhs per annum, as well as customers who work for a significantly larger universe of companies. We offer a paperless approval within record approval times (almost all loans get approved in 15 minutes to 4 working hours), with a majority of loans being disbursed within 24 hours of document collection, in a customer-centric experience.
Share how big do you see yourself growing in terms of reach, tractions and locations covered?
Since it is operational in 3 cities at the moment: Bangalore, Chennai and Delhi (NCR). By the end of the year, the platform plans to expand to the top 13 markets in India. The total live outstanding balance of personal loans across these 13 markets is pegged at 200,000 crores. We believe the untapped opportunity (which the incumbents don’t focus on) is of a similar size – an opportunity we aspire to capitalise on.
It is partnering with multiple platforms through which it can access pools of prospective customers who are underserved by the existing players in the market, including: payroll processors, online & offline car dealers, travel portals, etc., in addition to sourcing a significant amount of business through traditional online media.
The startup has raised 4.5 crores of funding since inception, including a recent Angel round of funding from a group of experienced financial services professionals. Qbera aims to raise its ‘Series A’ round of funding before the end of the calendar year.
