WeRize, India’s first comprehensive socially distributed financial services platform for small towns, said it expects to reach $200 million in annualized revenue by 2025. The company, which has 500,000 customers , aims to onboard 2 million customers over the next three years. and expanding its presence in more than 4,000 small towns across the country.
The two-and-a-half-year-old platform which offers savings, loans and insurance products, said it aims to become the leading financial services company for small towns in India. The company, which is backed by well-known investors such as Kalaari, 3one4, Orios and Picus, is already operationally profitable and has annualized gross revenue of $6.5 million. The company is poised to achieve EBITDA profitability by the end of this year and is growing 15% month-over-month, quadrupling each year.
“From the outset, our goal was to create a profitable and sustainable business that will add value to the lives of small town residents,” said Vishal Chopra, co-founder of WeRize. “We achieved operational profitability within the first two years of our launch and expect to be fully profitable in 2022 despite rapid growth. This is the result of our identification of huge white space in the market, the creation of unique products that meet the needs of small town customers and the use of ultra-low-cost and scalable independent distribution.
Interestingly, while most fintechs offering loans are struggling with defaults, WeRize said its defaults were below 0.5% (up to a few lakhs over the past two years), which is unprecedented in this space. The company attributes this to the design of its products and its machine learning engine which uses information from more than a billion data points collected from more than 500,000 customers of the platform, for the management risks and product development. Today, when a customer requests a financial product, WeRize obtains nearly 5,000 data points per family that help the company assess the risks involved.
WeRize said it solves the challenges that customers in small towns in India face when it comes to accessing financial services such as savings, loans and insurance. The company’s clients include salaried employees such as teachers, accountants, FMCG distribution crews and junior PSU employees, who earn between Rs 15,000 and 30,000 per month. One of the biggest challenges this segment (nearly 50-60 million people across India, including salaried and family members) faces is their inability to obtain loans, credit cards and insurance products, because most of the big banks do not serve this clientele given their short lifespan. Value.
This is where WeRize seeks to make a dent. As a full-service provider, WeRize manufactures, develops and distributes a loan, group insurance and savings portfolio that is customized to the requirements of customers in small towns. Using its proprietary “Social Shopify of Finance” technology platform, WeRize said it has empowered thousands of finance and digital savvy freelancers to sell its financial products in their social circle; solve the high contact need in these geographies and significantly reduce their marketing costs. 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 a distribution of freelancers without any of its own field staff 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 1,000 cities in India with only their technology and data science platform and thus save big. The result is an extremely profitable and scalable distribution model.
“We are currently at an annualized gross revenue run rate of $6.5 million with nearly 15% growth month-over-month. We are aiming to hit $200 million in (annualized revenue ) by 2025 and become the leading financial services company for small towns in India,” Chopra said. “Through our social platform Shopify, we are also confident to create thousands of employment opportunities for freelancers in small Indian towns.”
WeRize collects nearly 5,000 variables per family from clients that involve bank statements and utility bill payments, based on which it assesses the risk involved before designing a financial product for the potential client. WeRize targets cities like Ludhiana, Sonipat from the North, Surat from Gujarat and Salem from Tamil Nadu. There are 750 such districts in the country and it is the most lucrative financial services opportunity in India at present, with almost 30-40% of India’s GDP coming from these small towns.
Additionally, WeRize’s “Social Shopify of Finance” platform enables its fleet of freelancers and social partners to interact with potential customers in these small towns, suggest relevant products and onboard them. These freelancers also promote its products in their social circle through social media channels like WhatsApp or Facebook.
The data or information collected from potential customers through its freelancers allows WeRize to create unique products and distribute them through its own channel. The single channel allows the company to acquire customers without spending a lot on marketing, which helps it achieve greater profitability.