NeoGrowth Is Banking On Scale, Favourable Unit Economics & Superior Customer Experience To Stand Out In Digital Lending Space

Fintech & Financial Services Startup50

In Startup50 2017: Omidyar Network, IIFL Seed Ventures, Khosla Ventures and Aspada –backed company, NeoGrowth, won this award for building a robust, profitable business model in the SME-lending space, and for multiplying revenue 7 times last fiscal.

Founder: Piyush Khaitan

Incorporated in 2013, the company facilitates digital lending to consumer facing small businesses and aims to build a sustainable competitive advantage around achieving scale, favourable unit economics and superior customer experience.

The company also uses alternative data for credit assessment as there is inadequate credit footprint and financial history for many customers and, hence, banks face a tough time in credit assessment.  It has its own filters like unique customer acquisition channels (direct agents, referral agents and telesales), new payment datasets for credit assessment, non-traditional scoring, dynamic repayment and automated collections to identify and serve these potential credit-worthy merchants.

Some of its unique solutions include NeoCash Online, designed exclusively for online sellers on e-commerce marketplaces and retailers selling online through independent portals. It has AdvanceSuite, an in-house technology platform, which covers the work flow management, entire loan engine and complete risk management.

 Implementation differentiation

The company was built on an important insight that traditional underwriting methods in India exclude more than 50 per cent of creditworthy small and medium enterprises. Hence, NeoGrowth does digital lending to consumer facing small business enterprises by providing unsecured loans repaid by card receivables, e-commerce sales and other non-cash payments.  More than half of the loans by NeoGrowth are less than Rs. 1 million and greater than 80 per cent of loans have been given to proprietorship and partnership firms.

Strategic initiatives

The company’s marketing strategy revolves around digital marketing initiatives to reach its consumer segment. It does campaigns integrated with its traditional channel to have a broader but relevant visibility. With its marketing strategies in place, the company aims to be a niche player in the digital lending space over the next few years. 

Quick Facts:

  • More than half the loans are less than Rs. 1 million and more than 80 per cent of loans have been given to proprietorship and partnership firms.
  • Company raised 450 million from promoters, Omidyar Network and Aspada Investment Company in in 2013-14.
  • In Series A funding in 2015, it raised again Rs. 450 million from Khosla Impact Fund, Accion Frontier Inclusion Fund and existing investors.
  • In 2016’s Series B round of funding, raised Rs. 1,073 million from IIFL Seed Ventures Fund and existing investors.

Poornima Kavlekar has been associated with The Smart CEO since the time of launch and is the Consulting Editor of the magazine. She has been writing for almost 20 years on a cross section of topics including stocks and personal finance and now, on entrepreneurship and growth enterprises. She is a trained Yoga Teacher, an avid endurance Cyclist and a Veena player.

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