Accel Partners backed startup, Quiklo has found its niche in financing the youth of India with aspirational products that they otherwise would not have been able to afford. Their target audience are students who don't have a credit card or are not eligible for consumer loans, simply because they don't have a credit history, income and subsequently a CIBILscore. Banks have traditionally stayed away from giving loans to such people.
However Quiklo, with their indigenous credit evaluation system have given loans to thousands of students with a remarkable NPA of less than 1%. This has resulted in a return customer of 30%. Currently they have about 50,000 app downloads and have processed more than 2500 loans.
In an interaction with Sujata Sangwan of BW Disrupt, Mrigank Shekhar, Founder & CEO, Quiklo shared details about his venture.
What was the idea behind the inception of Quiklo and when was it started? Kush, Rahul and Me (the 3 Founders) were part of a startup called allMemoirs which was into Personalized Shopping and Social Commerce space. We had developed good traction on our App while still in bootstrap mode. While talking to investors for fund raise, we realized that the market potential of that idea was not huge and marketing money would play a big differentiator in determining the best company. That is when, we decided to pivot. Tracxn had already invested and we were in talks with Accel for fund raise. Both of them supported our team and decision, and Accel also put in an initial pre-seed round and incubated us in their startup pad. That’s when we started considering the credit problem faced by students and young professionals, and how lack of credit hampered the needs and aspirations of the new to credit segment. After lot of discussions, we officially launched Quiklo in October 2015, where we got our first customer from Bangalore.
How does it work? We have a Mobile App based product, which the user can download and browse through the available categories (Laptops, Mobile, Cameras). The catalog is EMI based, and the user can filter products based on the EMI he can afford per month.
Once the user selects the product, he applies for a Loan which includes:· Uploading KYC documents and College Id Card
· Providing Academic Details
· Providing Parent Details
· Providing Access to Social and Mobile data
The User application is passed to the Quiklo credit Engine called RADR (Real Time Alternate Data Risk Engine). The RADR Engine creates 500 data points from the information entered by the user and runs algorithms to determine the Credit Score and Credit Limit for the User.
We pass the Quiklo score to our partner NBFCs and get the Loan approval. The Loan in on the books of our partners and not on our balance sheet. Post approval, the customer makes the down payment and the product is ordered from our retail partners. We do not hand over cash to our customers, but ensure that the end use of the product is as was intended during the time of application.
What are the unique key features of your venture?· Unique Product – The Quiklo product is unique as it provides credit to students, who are not covered by Financial Institutions. Credit penetration in India is low as most Loans given are either collateral based or are secured loans. There is a huge underserved segment which needs credit for their needs and aspirations, a part of which is served by having Laptops and Mobile Phones. Our product helps the new to credit segment meet this need.
· Unique Credit Scoring – Alternate Data driven approach to credit scoring which can assess New to Credit segment quickly. We have built the unique underwriting capability for the segment which does not have prior credit history. We have the fastest approval time in our segment.
What are your future funding plans? We plan to start our fund raise process end of May onwards.
Can you talk about the Loan Portfolio that you have helped build? Given that we have been operational for 18 months, we have seen multiple vintage cycles. 25% of our loans have been fully paid back. We have also seen 30% repeat customers, which shows stickiness to our product.
What is the next big thing in the pipeline? We just launched in Pune and Chennai and will be launching in a couple more cities by end of the quarter. We will be launching near instantaneous approval soon.
How do you look at expansion? We have defined a city expansion template, using Bangalore as the city which sets the pace. We try out various marketing techniques in Bangalore, incorporating the ones which work in our template and rejecting the ones which do not work. We then launch in other cities like we have done in Chennai and Pune. These next set of cities use proven marketing techniques and we do not experiment a lot here. We plan to add 2 cities every quarter till a year. Then we plan to go fully digital for expansion, as that is the time when the eco system will be ready to go paperless and contactless.
How big is the market? The Market for Mobiles and Laptops for Student on EMI segment is roughly $4 B.
