Fintech, Slice: Slam Dunk: Can Rajan Bajaj seize a much bigger slice of the fintech pie?

Rajan Bajaj, Founder and CEO, Slice

In 2015, Rajan Bajaj instantly forgot the fundamentals of dribbling. Representing his dwelling state Rajasthan in Basketball Nationals throughout his faculty days, this younger boy began enjoying like a rookie. After working simply 10 months for Flipkart, the IIT-Kharagpur grad give up his first job and began a fintech enterprise in January.

“I appreciated my job at Flipkart,” he confesses. Nevertheless, what he appreciated essentially the most was beginning a enterprise. Coming from a middle-class household in Alwar, Bajaj’s father was an engineer and mom was a trainer. “Nobody within the household ever had any enterprise background,” he recollects. The thought of ​​turning into an entrepreneur sprouted throughout faculty. And for 4 years he saved considering. Describing as short-circuiting his stint in Flipkart’s product group, he says, “If I hadn’t give up and began, I in all probability by no means would have been in a position to do it.” It was the proper time to use. And he knew he might do it.

By early 2015, Bajaj had excelled in research and sports activities. He had perfected the artwork of working whereas dribbling; The three-point basket scoring was executed with none fuss; And the pace and management over the ball gave him immense confidence. Again in 2015, when he was able to make the leap, he anticipated a halt in entrepreneurship. The sport was on.

In April 2015, a month after leaving Flipkart, Bajaj began a rental startup referred to as Mesh. Whereas the identify was impressed by Lisa Gansky’s e book—The Mesh by Lisa—which she learn throughout her second 12 months of school, the enterprise concept was influenced by Airbnb-type startups impressed by the thought of ​​a sharing financial system. “The homes have been mendacity for hundreds of years. Nobody paid any consideration to this. And Airbnb made one thing out of nothing,” he says.

Aries was additionally attempting to make one thing out of nothing. Bajaj began with gaming console, digital camera, cycle and DVD rental in Bengaluru; Created an internet site, promoted it on platforms like OLX, and began ordering my bike. “It was a really hacky factor to do,” he says. The enterprise proposition was nice: why purchase second hand when you possibly can hire it? The enterprise additionally picked up tempo – about two months later, Bajaj needed to rent a supply boy to deal with the rising orders.

Slam Dunk: Can Rajan Bajaj grab a bigger slice of the fintech pie?

Though the enterprise grew, the issues additionally elevated. After just a few months of dribbling, Bajaj realized that he was unable to attain. He forgot the fundamentals: the fingers must be used, not the palm, to regulate the ball. In a fast-paced sport like basketball, the transfer is management. Bajaj, nonetheless, had no management from day one. The explanations had been many. The rental market was not giant. Second, insurance coverage, logistics and injury had been troublesome to trace. And in the long run, he will need to have been very fast with the rental enterprise.

Bajaj then rapidly turned to automobile and bike leases, a extra shared financial system enterprise mannequin. As of September 2015, the enterprise confirmed some promise. Mesh used to get 20-30 orders a day, nevertheless it introduced a distinct sort of mess: managing automobiles and accidents. The younger founder hit the pivot button once more and moved to {the marketplace} mannequin. After just a few months, it additionally began to lose steam. “The enterprise did not scale,” she laments. In reality, not one of the earlier ventures he put to scale. Now Bajaj made one final determined try. He shifted to renting furnishings. Sadly, it additionally bombed.

Slam Dunk: Can Rajan Bajaj grab a bigger slice of the fintech pie?

By December 2015, and some months of constant and fast pivoting, Bajaj thought it had discovered its candy spot. Mesh became Buddy, a buy-now-pay-later (BNPL) enterprise. “The mannequin was doing effectively globally, and we thought it might work in India,” he says. There was another excuse. Whereas in faculty, Bajaj needed to enter funding banking. Buddy was his way of life his finance dream. Buddy, nonetheless, had his share of the blues. State Financial institution of India already had a product of the identical identify. Bajaj needed to change the identify of Buddy to Slice Pay.

For the subsequent three years, until 2018, the enterprise gathered momentum. Then instantly, in 2019, Bajaj turned to bank cards. The explanation was easy. BNPL couldn’t scale as a result of merchants had been unwilling to pay extra fee. The mannequin, Bajaj outlines, solely works if retailers pay greater commissions. “By 2018, we realized that BNPL is the worst product expertise ever,” he says.

Slam Dunk: Can Rajan Bajaj grab a bigger slice of the fintech pie?

Three years, from 2016 to 2018, Bajaj once more forgot the second fundamental of dribbling. Don’t throw the ball too excessive. In 2019, he switched to playing cards. Slice began issuing credit score and fee cards- ‘Slice SuperCard’ with Visa and SBM Financial institution India. The main focus was on Millennials and Gen Zs, and Slice allowed them to pay payments, handle bills, and unlock rewards.

This transfer has lastly proved helpful for Bajaj. In June final 12 months, they raised $6.07 million in a pre-Collection B spherical of funding. Twelve months later, he acquired one other $20 million. It was a slam dunk in November 2021. The primary-time founder raised a staggering $220 million in a Collection B spherical, lowering Slice from $200 million to over $1 billion.

The ‘bank card challenger’ appears to have executed sufficient to justify its billing. It counts Tiger International, Perception Companions, Gunosi, Das Capital, Finup, Bloom Ventures India and Simil Enterprise Companions among the many lengthy listing of marquee backers; Claims to have 4 million registered customers on its app, and strikes an annual income run charge of $60 million. The startup is now on the point of delve deeper into the funds sport. “We’re launching UPI (Unified Funds Interface),” says Bajaj. “We plan to take a significant chunk of the patron enterprise in India,” Bajaj says. Concurrently there’s a piece of card and fee of commerce.

Business specialists aren’t stunned by the quick tempo of progress and the way in which Bajaj is reducing into the fintech market. Sivathilak Tallam, Vice President of Unitus Ventures, explains what has labored for Slice. Credit score has at all times been a problem for the phase by which Slice operates—Gen Z (early 20s) and Millennials. “Startups like Slice are making this demographic attain credit score simpler than ever,” he says. startup, he underlines banks on two elements. The cardboard is an modern manner of splitting purchases into cost-free EMIs. It’s a main driver within the present financial system and shopper shopping for energy. “Tech-driven sourcing and on-boarding helps to speed up seamless adoption inside shoppers,” he says.

Slam Dunk: Can Rajan Bajaj grab a bigger slice of the fintech pie?

Nevertheless, what suggests traders’ bullishness in backing Slice, particularly Tiger International, is an attention-grabbing set of knowledge. Mrigank Gutgutia, affiliate associate at homegrown consulting agency RedSeer, factors out that India is a market with very low penetration by way of bank cards. For an investor, betting on a startup relies on two parts. The primary is the macro story, which implies the sector by which the corporate operates. He needs to be good, sturdy and in the proper place on the proper time. Put up-Covid, fintech ticks all these containers. As well as, there are an estimated 30 million lively bank card customers in India, or folks with no less than one bank card, Gutgutia says. Now examine this to smartphone customers: over 500 million. “The headroom for bank card progress is large,” he says.

The second part of any funding thesis, Gutgutia outlines, is the way in which the corporate is getting funding. “Slice is bridging the credit score divide, with pay-later now and product-finding market match,” he mentioned, including that the fintech startup is bringing thousands and thousands of customers who’ve zero credit score scores into the mainstream. Is. He believes that Tiger just isn’t betting on the slice he’s at present. “They’re betting on what Slice could be in 5 years,” he says, due to cross-selling and the numerous monetary providers and merchandise that Slice can purchase sooner or later.

Slam Dunk: Can Rajan Bajaj grab a bigger slice of the fintech pie?

Digital credit score startups like Slice even have an edge over giants like Paytm. Whereas for Paytm, the lending enterprise just isn’t massive, Slice has at all times led a digital credit score existence, says Gutgutia. He underlines that the massive plus for traders is the pace at which it’s rising in addition to monetizing. “The long run appears promising,” he says.

Nevertheless, he’s fast to warning. The credit score lending market is getting hyper cluttered, with each participant chasing the identical set of shoppers. Whereas Slice has differentiated itself in constructing a sturdy underwriting technique to develop its enterprise, the magic sauce is buyer stickiness. Catching them early just isn’t the sport. Maintaining with the youth catch, cross-sell a number of providers and stick to the person for a very long time will resolve the winners. What can slice?

Bajaj believes that they’ve a agency hand on the heartbeat of Gen Z customers. “We’re targeted on making a huge impact,” he says. Nevertheless, what the younger founder wants to recollect is once more one of many fundamental guidelines of dribbling: do not throw the ball too excessive.

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