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The fintech empowering micro-entrepreneurs | Mohan K @ IppoPay
323 Plays1 year ago
Do you think digital payments are risky? This episode will change your perspective! IppoPay is a Chennai-based fintech serving the vast underbanked and unbanked sector in India, helping it adopt digital banking swiftly. Mohan talks about his learnings over his long and varied path as an entrepreneur and shares how he created luck for himself multiple times.
Read the text version of the episode here.
Read more about IppoPay:-
1.Interview with Mohan K, Entrepreneur, Co-Founder and CEO of IppoPay
2.Long struggle behind IppoPay’s quick success
3.This Niche Payment Solutions Startup Is Empowering Lakhs Of Businesses In Smaller Towns
6.Light Microfinance, IppoPay to offer digital loans to MSMEs
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Transcript
Mohan's Entrepreneurial Journey
00:00:00
Speaker
I am Mohan. Co-founder, she was three puppy.
00:00:15
Speaker
Picture this, it's the year 2006. Mohan is a young engineer who was born in a village and managed to secure a job in Chennai as a web designer. But he got made of and instead of accepting defeat, Mohan took inspiration from Zoho and decided to build his own business. And that was the start of a 16-year journey into entrepreneurship.
00:00:36
Speaker
Mohan said many more times than he succeeded, but he never stopped trying and his sheer domination and resilience is what has made Ipope one of the leading pavement solutions companies in South India. If this Rona Coaster conversation Mohan tells your host Akshay Dutt about his learnings over his long and varied path as an entrepreneur and talks of how he created enough for himself multiple times. If you are an entrepreneur seeking inspiration to keep going despite adversity then you are at the right place.
00:01:03
Speaker
Stay tuned and subscribe to The Founder Theseus podcast and any other streaming platform for more inspiring stories from founders.
Ipope's Verticalized Payment Solutions
00:01:20
Speaker
Okay, so what's like an elevator pitch of Ipope? Ipope is a verticalized payment infra startup. What is the implication of the word vertical here and what is the implication of the word infra here? Okay, so if you see other play in the market, they go to horizontal.
00:01:37
Speaker
And the plan is like resol pay and cash free. Yeah, exactly. So they provide API, they provide infrastructure for all the verticals. But if a pay is something different, we go to the vertical. Let's say we choose SME vertical. We go to into verticals, understand the real problem, and give them a full stack solution. So when we choose SME vertical, the offering business retail,
00:02:08
Speaker
So we wanted to help a hundred percentage of their transactions. So let's say you take people who sell fruit juice, vegetables. So they work all 365 days. They don't have a time to go to bank, open a bank account, all those stuff.
00:02:30
Speaker
So we help them to open a bank account within our applications. We offer a co-branded debit card, which we partner with our banks and the QR code. So that means we give them a full stack solution for postcard vendors to keep their transaction in the digital format.
00:02:51
Speaker
Okay. Okay. Amazing. Very interesting. Okay. So we'll dig deeper into which all verticals you're targeting. But yeah, that gives me an idea of vertical layer. And what is the meaning of the word infra here? You said you are a payment infra. See, infrastructure, right? We provide a mobile application. We provide a card. We provide sound box, you know, like we consider all this infrastructure for their business. Okay. So like digital transaction infrastructure.
00:03:17
Speaker
A payment gateway is just providing a checkout option at the time of checkout. In addition to that, you are also providing banking through the debit card and bank opening and all of that. These additional services to enable payment. In today's world, is there a
00:03:36
Speaker
distinction between offline payments and online payments. You know, I mean, there was a time when, for example, Pine Labs was known as the offline payment company, like they would process through POS machines and like, say, a razor pay would or cash free would be online payment company.
Navigating Online and Offline Payments
00:03:51
Speaker
Does that distinction still exist? Are these two separate? Yeah, of course, it's already exist. And even according to RBI, they have a different policies and regulations for an offline and online.
00:04:02
Speaker
Okay, but most of these companies are doing both, like Pine Labs is also now doing online. Yeah, Pine Labs started both lines. Now, Pine Labs started as an offline focused startup. Now, they just started into online gateway payment checkout.
00:04:22
Speaker
Cash-free and Razorpay kind of people started purely focused online businesses. They provide entry and solution checkout process for the e-commerce marketplace. If you run any online business, they can integrate their API to collect the payments. So when I started, because I wanted to tell you the complete journey of Hipope, then we can cover your
Mohan's Career Transition and Early Ventures
00:04:44
Speaker
journey. Let's talk about your journey as a founder. What was the story behind the very first startup?
00:04:51
Speaker
I am originally from Rameshwaram, from a small village, fisherman family in government school, like very K2, K3 engineering college. So when I was entering into engineering, it was very difficult because first, you know, like up to 12th standard, I was studying Tamil media.
00:05:10
Speaker
Right. Wow. Okay. So I had a complete struggle finishing my engineering. I still remember like my seventh semester, I had 23 areas. Okay. So 23 area plus all the exams were in English. Yes. You are right. You know, like.
00:05:28
Speaker
From the Tamil medium, I was really struggling a lot. At the same time, it's not only about the medium. I was about to enjoy my college life. So, 23 plus 7, the current semester,
00:05:44
Speaker
But I managed to finish my engineering without an idea when I came out of the college. In 2006, I came to Chennai. Technically, I didn't have any knowledge. Even in those days, if anyone asked me to tell about myself, I was struggling.
00:06:03
Speaker
I started my career as a web designer. Those days, only web designer and web developer. Nowadays, everything is changed. People are saying UI, UX, front-end developer, back-end developer. I started as a web designer in 2006. I joined a very small organization. Only six people were working in the organization. That is the place I learned a lot.
00:06:31
Speaker
Then I wanted to start my own company. That was my passion. In 2008, I started Romesoft. I'll tell you a small story. The first company was a very small company. We were doing all the static websites in the organization. The second company, which I chose was a little bigger than the previous organization.
00:06:57
Speaker
Within the same company only, you can keep doing more things. Correct. I tried my best to speak to my boss, told him that, let's take e-commerce website, let's take dynamic big website.
00:07:14
Speaker
He was very clear. He was your first job. Yeah. He told me, like, Mohan, you are fresh air. How we can manage if I take this big project? I don't despise my name. So then I decided to move out. I joined another company. After 15 days of completion, my boss called me to his cabin.
00:07:35
Speaker
He said to Mohan, I am extremely sorry, like you are not performing well, so you ought to leave now. Well, then I said, sir, I completely accept because I know about myself, but here I am learning a lot. Can you give me the opportunity as a first sir? He rejected. Then I tried my best to convince him, but end of the day I failed.
00:07:58
Speaker
then I said, okay, sir, from tomorrow I'm not coming. No, no, no, you got to leave now. So that was a really like a pain point. Then I left, cried a lot. Then I decided myself saying that, you know, I couldn't tolerate, I couldn't control this failure. What should I do if I, no one can like,
00:08:20
Speaker
Then my inner heart is saying that you have to be the boss if no one wants to fire you. That was the moment I decided to start my own company. Then I started as a freelancer. First one year I used to do freelancing work. I go to the people, meet people, trying to take a static website for 5,000-6,000 rupees. That's how I started Robesoft.
00:08:42
Speaker
So, being in Chennai, we are always fascinated by Zoho, right? So, even all my friends, like they said, we have to work with Zoho kind of company, what infrastructure, what are people, what kind of salary, they are giving like a laptop the first day when you join.
00:09:04
Speaker
I was really passionate about the Zoho. I started reading about Mr. Sridhar Vyambhu. He is my guru. Then, while I am doing Romsoft as a development company, I wanted to start my own startup. The first startup which I built was Topcook. This is a food tech. So,
00:09:24
Speaker
I started before even you heard about the word called Suiki. Zometo those days is like a review-based website. So the logistics was not familiar in those days. Only the restaurant people,
Founding Felucie and Initial Success
00:09:37
Speaker
whoever has a driver, they usually deliver. So I myself unbordered around 300 restaurants. I didn't know what to do next.
00:09:45
Speaker
Okay. I failed. Then I started, I just changed the technology. I converted into a single restaurant management software. Okay. It's called the Minwater app. And I didn't know what to do next. Failed. Then I started a company called JustMaid.
00:10:00
Speaker
Inspired by Jestile, I was thinking, now people are going to Jestile, dial, and get the service. What will be the next? People have to do it via email app. So this is also even before you heard about the word called ARBUNGLAP. I started Jestile. I onboarded some AC McConnie, kind of people failed. Then I started co-founding with another people, started Rawon as a B2B marketplace.
00:10:29
Speaker
before Udan. Like this, I founded seven startups. All got failed. Every time when I failed, when I go to bed, I feel very bad, very sad. Sometimes, even I didn't have the maturity of what I have right now those days. I usually cry. But next morning, I get up with the same power and energy.
00:10:57
Speaker
Okay, I usually say like, no, I'm not going to give up. Let me try again. Okay. So after four or five failures, then later stage in a failure, it used to be like in my failures, like I used a lot about the failures now. Okay. One more failure. Let's try one more failure, you know? So that's how my journey was there, you know, like before it pop up. Luckily, like I met a person in UA called Omar Binberg. We both co-founded a startup called Felucie in 2018.
00:11:27
Speaker
Okay, so that's the place I learned about fintech, banking, all those steps. I was the co-founder and CTO. My responsibility to build a product, technology, Omer was taking care of the business, you know. That was my first success, you know. As I said, I came to Chennai in 2006. Okay, first success, which I saw in 2019. 13 years of my study.
00:11:53
Speaker
Okay. And Felucie was B2B SaaS business? B2B FinTech. Pure payment gateway. Okay, okay, okay. Like a cash tree. So, you know, like what happened? I used to implement a lot of good things. I mean, new things. According to UA is going to be licensed as a new. But in India, I just copied from racial cash tree. Simple. Okay. So,
00:12:19
Speaker
In less than a year, we have become very famous. Even the Forbes magazine has been listed as the top 20 fintech startup in the entire Middle East. Those days, I usually meet a lot of merchants, most of the business people from India.
00:12:37
Speaker
So whenever I meet Indian people in UAE, they say, Mon, product is amazing. So why don't you focus something like this in India? I said, sir, I just start seeing the success in
Ipope's Growth and Market Focus
00:12:51
Speaker
my life. Let me explore something more than we realize. So what happened one day?
00:12:58
Speaker
I reached out to Amrish Rao, Pine Lab CEO. If it is fintech, he is the father of the fintech. If it is payments, he is the one. The person who founded Citrus Pay and sold his company to 160 million dollars is unbelievable. Out of my own curious interests, I texted via LinkedIn, Amrish. Amrish, take a look at this fallacy. I'm the co-founder. Give me your feedback.
00:13:28
Speaker
So he replied within 10 minutes. He said, Mohan, this is amazing. Why don't you focus on India? The market is very big. There is a UPI coming. This is going to be the future. Why don't you consider to launch something like this in India? I was literally shocked. So now it's getting very serious because the person who's done something big in the industry, saying something, we have to take it very seriously. That was the moment I decided I'm going to do something in India.
00:13:57
Speaker
Okay. And I pictured this idea Tomer. He said, okay. We spoke to our investor. They said, okay. I came to India and I called my friend, you know, Jay. He's a techy. So pure tech, you know, I call Jay. I said, Jay, I have an idea, something like Fraser Bay. Okay. So would you like to join? He said, yes. Okay. Then we immediately like started building a product.
00:14:21
Speaker
Okay. So one day, like I called Jay, I say, Jay, how about the name called? Okay. It means now, right? In Tamil. Okay. Okay. So because we want to focus B2B, right? We are telling our merchant, okay, guys, we provide a technology, tell your customer pay now.
00:14:41
Speaker
He said, this is an amazing name. Let's do it with the name. Then we registered the name, we do trademark, all those stuff. We started January 2020.
00:14:54
Speaker
Okay, so we hired five people and me and Jay, seven people, we started together. Jay was focusing on building a product because when we decided to do something like this in India, we were clear about one thing. You know, we are not going to focus a white table. We don't want to outsource the technology to any other company. Let's speak from the scratch. Okay.
00:15:13
Speaker
Because even I needed some time to... The Dubai product was also built from scratch? From scratch. Because the Dubai market is very small. So for those markets, it's enough. But when it comes to India, the scale is going to be large, right? So even we changed that technology in Ipope. You needed it to handle more transactions. More transactions, more mechanisms.
00:15:36
Speaker
Yeah. So now I used to call my friends. One more question here. Ippo Pei was focusing on what segment? Tell you. This is very interesting. Sorry. When this is Felucie. Like Felucie was in which segment and Ippo Pei was in which segment? So Felucie was focusing on small businesses.
00:15:53
Speaker
Online businesses. Online small businesses. Like D2C websites. Exactly, exactly. We provide API, we provide a payment link where the merchant can collect money from the customer. When we founded Ipope,
00:16:09
Speaker
we found a repo pay for the offline retail businesses. So I came from a ruler village. I personally know what exactly they need. So we wanted to start as offline like Paytm, phone pay kind of business. Then we start building a product. I spoke to a couple of banks. Then I realized that if we need to do something like this, we need a lot of capital.
00:16:41
Speaker
So, they come up with $100 million of funding. You can only penetrate or monetize from the lending side in the offline businesses. Obviously, the first year is going to be a complete one. So, then we changed our idea. Let's start online because the beauty of the online business is you can start making money from the first transaction itself.
00:17:06
Speaker
2 rupees to 20 rupees, revenue will start flowing from the first transaction. Then we change the technology to online business. We partner with again, raise a pay cash-free couple of banks to start building a product. Now we need to have a nodal account to help online businesses.
00:17:25
Speaker
I called a very big startup bank in India, Chennai branch. I called them. I said, I want to speak to the concerned person who is handling payment gateway. The lady asked me, what is payment gateway? I dropped her phone. There is no point to spend my time. Then somehow I managed to convince Mumbai team. Then I called Rich to Chennai. I started working with the bank. The bank
00:17:53
Speaker
asked me to give me the 5 years projection. I don't know anything about projection, I don't know anything about Excel, nothing.
00:18:03
Speaker
I told them, boss, I don't know what I can do for next year, but you're asking me 5 years' projection. Banks must need this kind of projection. You should know how much volume you can do. How do I know how much volume I'll do for after six months? Then somehow, I used to convince them. I spoke to them. They rejected. First reason, they said, from Chennai, payment gateway, not possible.
00:18:29
Speaker
Okay, so no one was approached to me before from Chennai. Second, you don't have any experience in India for FinTech. Okay, then I spoke to that digital banking head. So all this struggle was for a nodal account. What is a nodal account? nodal account, when we manage merchants money, okay, we are not eligible to handle everything on our own. So the bank has a specific account called nodal account to manage merchants money.
00:18:59
Speaker
The money sits there before it is further transferred to the receiver. I was very angry. I told the digital bank, I said, if you don't accept, I'll go to the next bank. If they don't accept, I'll go to the third bank. No one accept me and I'll occur a bank. We said, Mohan, you are speaking out of your anger. This won't work.
00:19:26
Speaker
Then, somehow, I finally managed to work with him. After one year, the same digital banking head was about to leave from the bank. He met me in my office for the Cartesiano last day. He said, Mohan, I remember when he spoke to me first time. You said, you are going to occur back. I was thinking, this guy is completely rubbish. He is talking rubbish stuff. Now, I realized something on you that I am very sure one day you will own a bank.
00:19:54
Speaker
Wow. So then that's how the journey started. Actually, as per my plan, we were making money. Then how did what was your go to bucket? How did you acquire? So we decided to focus day to day three merchants.
00:20:10
Speaker
Okay. And we connected with lots of referral partners, right? So let's say if you go to Delhi, if you go to like Punjab, you know, there are some people, referral partners who has lots of TA to T3 merchants, right? Obviously, we have distributors, FMCG distributor will have a lot of retailers that he will be supplying to. Yeah.
00:20:33
Speaker
So we were focusing API, we were focusing invoicing and payment links. Let's say we were working with freelancer people. The freelancer, most of the freelancer doesn't have the website.
00:20:49
Speaker
Right. So they provide a logo design. They provide some online services. We provide app. We provide an invoice option. Now very similar to Zoho. Kind of, you know, they create invoice, send it to their customer and collect the payments. Okay. So my focus was not API. My focus was tier two, tier three people who doesn't have a website.
00:21:09
Speaker
Okay. That's how we started. Then later, you know, like I start getting some big merchants, you know, decent merchants, we start making revenue. That time we were still focusing. What kind of big merchants?
00:21:24
Speaker
So there are some big merchants, good merchants from Chennai. It's not like Flipkart Amazon. It's a decent, you know. Like D2C companies or D2C companies. So then finally, you know, like planning to raise funds. Okay.
00:21:39
Speaker
When was this? This was 2020, around the COVID time. The lockdown did not really impact too much because I guess online payments became more popular. My development company, I got a rooms out.
00:22:01
Speaker
impact with that. But PayPal is really helping me because those days we were focusing on building a product. All our work from home, Jay was focusing on that. Everything moved to online, so I used to make a lot of Zoom calls to convince the banks.
00:22:19
Speaker
It was easy for me. Otherwise, we have to draw it to the bank every time. So, when I started in Popay, most of my mantas, relative friends, all said more, don't do this. Because the competition, thin margin, how you are going to compete with raise a pay, you know, like cash-free kind of people. Then, the real struggle started after I started raising funds.
Challenges and Persistence in Funding
00:22:47
Speaker
You won't believe it.
00:22:49
Speaker
I pitch it to more than 100 investors. You name any funds in India. Accel, Matt trees, two small angel investors. All are rejected.
00:23:09
Speaker
How did you keep going 150 times? You heard no. Wow. That's amazing. You know what? There was a time, lockdown time, second wave lockdown time. Your story arranged a pitch session. Okay. I should pitch it to 11 investors. Okay. 30 minutes slot. 11 investors all same day.
00:23:31
Speaker
They arrange their, they manage really well, you know. So, every 30 minutes, I have to speak to the investors, okay. 20 minutes pitch, 10 minutes Q&A. 11, okay. I was prefer the end of the whole day, right. All 11 investors told me the same projection story, okay.
00:23:50
Speaker
Same, no changes. So, how will you compete with Razor? I was thinking, maybe all these learned people, maybe the close friends, they decided, I don't know what to answer. I don't know. Same, no changes. Not even the single word change. You can't do this. High competition. You can't compete with Razor. The margin is very low. And same story.
00:24:18
Speaker
But I didn't give up. Trust me. So the same day, I pitched to one big top level guy at Flipkart. He asked me, Mon, what is your USP? I said, sorry, I don't have any USP right now. We just do what rights of pay guys are doing. But we'll come up with the USP later. We are in the very early stage. He said, Mon, what is your USP?
00:24:46
Speaker
Sir, I don't know who you are speaking. Third time, what is your ASP? Imagine, right? Someone asking the same question and they knew that you don't have an answer. What you can do? Okay. One, we can like tell them that, guys,
00:25:03
Speaker
you know, like, go away, we can't do to the investors, right? Or the second absent, like, cry, same, you know, we have to, like, take out of this anger or frustration, right? So, the whole day was so sad. The same person, you know, like, texted me after one year, LinkedIn, Mohan, I'm extremely sorry, when you pitched to me,
00:25:27
Speaker
You know, like those days, I was so skeptical about you and the product, but you proved me wrong. Okay. All the best. Okay.
00:25:38
Speaker
You know what? When I was building a product, I pitched to the early stage, you know, like I was pitched to some investor. They said, Mohan, it's a good, but you have to go to market, finish the product. Then I finished the product, I went to the other set of investors. They said, oh, product is nice, good, but you have to go to the market, create some traction, you know. Then I created some traction. I said, I went to other set of investors. They said, oh, traction, but now you have to scale up. I said, what?
00:26:08
Speaker
You know what? I realized one thing the same day. Okay, investor asked like our wife, even if we live 100 years, we can't understand them. Okay. So then, you know, like, finally, I managed to raise from Coinbase, you know, like we raised $2 million, you know, now we have money, we have name, then I accepted to my digital path. Like these are your clients who were using the product, who?
00:26:36
Speaker
Coinbase. Okay. Okay. Okay. Coinbase was our lead investor. Wow. Coinbase, which is into crypto. How did they get interested in Epope? Okay. You know what? When I was running a software company, you know, so one guy told me like he's supposed to pay $500. Okay. I think this was 2015 or 2016.
00:27:01
Speaker
He said, can I pay you a Bitcoin? I asked him, what is Bitcoin? He said, Bitcoin is a cryptocurrency. What is cryptocurrency? Are you trying to cheat me or what? And I was shouting, I canceled the project. This guy is trying to cheat me. He's speaking like an alien. Then I started reading about Bitcoin. I started reading about cryptocurrency, all those stuff.
00:27:25
Speaker
In that journey, I learned about Coinbase, I learned about Brain Amster. Then I read his story, how he started Coinbase. Why he started? He was with Airbnb, head of payments. Then I read everything.
00:27:40
Speaker
I was thinking in my mind, saying that someone built a marketplace for cryptocurrency in 2012. How genius he is, right? Okay, so then he became my mentor. I usually watch large service interview. Then I said, one day I want to take a photo with this guy. This was 2016, right? When I started Ipope, I sent a call in my, I mean, LinkedIn message to Brain Amster.
00:28:09
Speaker
I said, hi brain, welcome to India. I still don't know why I said welcome to India. I said welcome to India. So, we do this, we do that. So, I want to speak to you. You are my mentor. Exactly after 30 days, someone called me from Coinbase.
00:28:32
Speaker
He said, Mohan, you reach out to my CEO. Why? What's the matter? Then, see, I was not prepared for the conversation, right? I was supposed to say that he's my mentor. I need to speak to him. You know what I said? I said, okay, okay, thank you. I reach out to him because I want to raise funds.
00:28:52
Speaker
Because I was in the territory of rising funds, you know, struggling with investors, right? Then he said, oh, nice. Then you should speak to Coinbase ventures, not Coinbase. He said, I'll connect, right? Next day, you know, like evening, early morning, so not evening, early morning, 7 a.m., I got a WhatsApp call. Okay. His name is Mr. Sanagarwal. He's from Coinbase ventures.
00:29:18
Speaker
He called me, go on, tell me, like, I want to know. That was very. Unformal. What's up conversation. I say, remember, I used to prepare multiple texts. I improved texts, texts every day, pitch tech, you know, I changed pitch tech for each investors. If someone specifically, you know, like investing into SaaS, my tech says it's a SaaS based FinTech. If anyone says we are FinTech, I say we are FinTech.
00:29:48
Speaker
I used to have 10 investor pitch tech, you know, but this was a very informal WhatsApp call. I said, I'm doing this, that this is why we said I want to help TI2, TI3 people, you know, like all those stuff. He said, Mohan, I feel, I strongly believe there is a synergy. Okay. I mean, very interested. I mean, wow. Okay. How much you want to raise? I said $2 million. Okay. I'll take care.
00:30:15
Speaker
This was early morning, 7 am, right? This is a late night for US, right? Evening, 8 pm, I got a term sheet. Wow! Which is early money for them. Amazing! So, he sent me a term sheet for 2 million dollars. I said 2 million is too much for me. I'm working with 1.2 because I want to raise from the local investors. Then I raised from some angels, you know, all those stuff. That's how we managed to raise 2 million. But why not make that 2 into 3 million? Like, why say no to money?
00:30:45
Speaker
You know what? Those days, RBI says every payments company should have 15 crores of net worth.
Achieving Profitability and Expanding Merchant Base
00:30:55
Speaker
Okay. Okay. My focus was to get the network. Simple. So now we have investors, we have name, we have product. Now we are shifting to our original idea for the offering. What was your, some numbers at that time when you raised with Coinbase? It would be the right number to track. Honestly, I forgot about the GTV. Okay. But those days we were, we were making revenue. We were in $3 million annual revenue.
00:31:25
Speaker
Wow, amazing. So even when I pitched to Coinbase, he asked me the valuation. I said $30 million, 10X. But finally, we managed to raise in $10 million pre-money valuation. Okay. Yeah. But $3 million, how much is that in crores? 25 crores. Amazing. So you were doing two crores monthly revenue at that time? Yes, exactly. At those days. Yes.
00:31:52
Speaker
Okay. That's pretty amazing because your earning is just like maybe one to 2%, right? Per transaction. Per transaction. But our, because we have to share with the banks, right? So, across revenue on the table, usually it will take 20 to 30 bips, which is 0.2 to 0.3%.
00:32:12
Speaker
That's the share left with you. This 25 crores revenue is the total gross revenue, not what is left with you. But technically, we become profitable from the first quarter itself.
00:32:27
Speaker
So, right. Then you decided to go back to the original vision of... Yeah. So, in terms of a team, because I want to say something about the team also, right? Like Chennai-based startup, I still hire from tier 2, tier 3 colleges. We hire firsts, train them for six months, you know? So, all our runways, even when we raise $2 million funding, right? We had a very small office.
00:32:51
Speaker
So, that was the 26th seated office. Even after we raised 6 months, we were there in the office only. Because I was usually very conscious about spending. So, all I learned from my service based company, when I was running a service based company, what was my ambition? My focus was simply to have 3 months runway.
00:33:16
Speaker
I was trying this from 2010 to 2020. All 10 years, my focus was to have three months runway, but never happened. Not even one month runway. So we usually pay salary every 15th. I will start begging from my clients from 25th. Even $100, I have to speak to them for 30 minutes.
00:33:44
Speaker
So, you know, like, some time, you know, like salary will come before time. After 25th, you know, like, even if I smile for anything in my home, my wife used to ask me, Mohan, what happened? Sell the game, huh? He looks like, happy man. So, this helped me a lot when I was starting, honestly, Haksai. Okay. So,
00:34:09
Speaker
Nowadays, even now we have a big team, we have CXOs, we have CFOs, all those stuff. They usually say, we'll make this for a year. I used to say, how much we are making this month? Tell me. No, Mohan, you have to protect it for a year now. Let me know how much we made this month and how much we spent. Simple. So every penny we usually spend very carefully.
00:34:38
Speaker
So, when I told you about the first service, 26, I only changed to another office after we have more than 26 people.
00:34:50
Speaker
We started our own plan, okay. We started building a product for QR code and I approached AS Bank, I approached ICICS, GFC to help me to launch QR code. Finally, like AS Bank and ICIC Bank because now I can give you the protection because I learned a lot, right?
00:35:09
Speaker
Okay. Now we have a projection. We have experience. We have a GTV, you know? So based on that. This would be similar to what Bharatpay does. Very similar to Bharatpay model, right? But when QR code, which will accept payments from all apps, person can pay through Paytm or Google Pay or Phone Pay or any of these. And you need a bank because the, the UPI providers like Google Pay has an ICS here bank. Okay. So we have to work with the NPCA for the UPI.
00:35:39
Speaker
Okay. So now we got the bank, we got everything. So I was telling like we were focusing online, right? Online, we were very similar to raise a pay cash free kind of people, you know. So easily, like I have my own theory, okay, for businessman versus entrepreneur. Okay. So if you do what others do in the industry, you are a businessman. Simple. Correct. But if you're solving a real problem, you are an entrepreneur.
00:36:08
Speaker
Okay. So, I decided myself that first two years I'm going to be the businessman, okay, for a puppy. Simple. So, we were just copying from other competitor. We were doing what they do. Okay. So, now my real entrepreneur journey started.
00:36:24
Speaker
So when I do research in the offering industry, in the market right now, I realized, I came to know something that every company, like a PTM, Phone Bay, Bharat Bay, Humaisan Bay, they hire freelancers. They hired agencies to deploy the QR code.
00:36:45
Speaker
Right, to onboard merchants. That is the big spend for them, like merchant onboarding users where they have to burn a lot of money. So, they offer 150 rupees per successful QR code.
00:36:57
Speaker
Okay. So, imagine like if you walk with this kind of model, your focus is to onboard more merchants, right? So, if I joined, you know, like I say like my focus is to onboard 10 merchants, 1,500 rupees, 45,000 rupees salary per month class, correct? Okay. So, then I created a new strategy in the market. Okay. So, Hipope was the first company who hired a full-time employee for the QR code deployment.
00:37:26
Speaker
So, we hired from our competitors. So, we called all the freelancers. I asked them to come to our office. There were 50 people came on the first day. I said, I'm going to take you as a full-time employee. Whether you do onboarding or not, I don't care. We will give you the monthly salary. They said, wow, this is amazing. This is something new to us. I'm happy.
00:37:50
Speaker
Then I said, you will get all the benefits, the developers who are going to get in the AC room, who are sitting in the AC room. They asked me, what? I said, I'm going to give you the provident fund. He asked me, what is the provident fund? I said, we take 12% and put it into our account. You won't believe, Akshay, 30 people left from the same hall.
00:38:10
Speaker
Because they really understand. They don't know what is this. One guy told me on my face saying that, sir, it looks like you are trying to cheat me. You are trying to take my money. I said it is not. I couldn't convince, but he left. I started with 20 people. Now we have around 200 people in Tamil Nadu, all full-time employees. I told them that, boss, you are onboarding 10 per day.
00:38:35
Speaker
at Tipo Pay, just focus 5. Rest of the 5, you are to go to the existing merchant to build a relationship. Speak to them, ask them what they need, ask them what kind of struggle they are facing with other competitors, and let me know. So, when they got a ownership from the company, when they become a real employee of the company, they felt very happy.
00:39:00
Speaker
One guy, I think around 9 pm, texted me while I was up saying that, sir, can I have a video call with you? I said, because I was very scared, I said, why? In the night time, I wanted to show you something. I said, okay. He showed me the offer letter, which I sent. He showed me his parents nearby.
00:39:23
Speaker
He said, sir, I was working with the same industry last three years. I said, first time ever I saw the offer letter, I'm happy. Look at my parents, they are very happy. So, when they get this kind of ownership, when I told them that, boss, you are part of the company, their onboarding level, number of onboarding, reach out to 12 sometime. So, one guy from Salem, he usually do like 25 per day.
00:39:52
Speaker
Well, okay. So then I asked them to slow down. I asked them, I gave them to, you know, like a focused merchant, you know, like to understand no more problem from me. You know, like I usually give incentive based on the problems that I didn't defend from the market. We don't offer incentive for the number of onboarding, you know. So what I do is I dedicate one day in a week, go to the market, the street, travel with my FSEs, speak to the merchant.
00:40:22
Speaker
You know, I go to the merchant, I ask, you know, like, who is your person? If they didn't tell me the name of my team, they'll get fired immediately. That means they don't even know your name, you know, that means you are building a relationship. So that's how we onboarded successfully 3.5 lakhs merchants in Tamil Nadu alone in a year.
00:40:47
Speaker
Okay, our focus is tier 2, tier 3, you know, like all our competitors focus in urban cities, you know, but we started from tier 2 to rural area. 76% of our merchant is from tier 2 to rural area and 50% of our merchant is the first type QR code. That means we introduce the QR code to them. We help them to deploy or receive payments via UPI. Even my own village, you know.
00:41:14
Speaker
We have 5 karana stores, small like Malia Kadei. So, we onboard a lot of autos, a lot of caps. So, we give them a free accidental insurance for one year, onboard them, help them. So, this is how we are very successful in Tamil market right now.
00:41:36
Speaker
We just started, I'd say, to Karnataka, Telangana. We are doing some pilot there. Because my focus is very simple. I want to focus on South India for the next two years. Chennai or Tamil Nadu market is very different from South India. Pan India is very different from South India. So, first two years, South India. Then we'll go to Pan India. That's our plan.
00:42:01
Speaker
What is the journey for the merchant who is getting onboarded? What does the team do for them? Do they ask him for bank details and then do the KYC and then connect his bank account and print a QR? What do they do? Yeah, so our FSC will go to the store. We collect the bank card and the other card. And FSC means field sales executive. Okay, so we collect the bank card and the other card. But luckily 100% of the people has the other card.
00:42:31
Speaker
There are some people, they don't have a pankar.
00:42:37
Speaker
always do full KYC. That means we should get a business proof. But this Puskar vendor, most of them doesn't have a business proof. So, we install Udayam. We create a business proof for the vendors. Okay. Udayam is like a adhar for small businesses. Exactly. Okay. So, 50% of the Puskar vendor doesn't have a Pankar. We create an E-PAN for them.
00:43:07
Speaker
Okay, you can apply and get instantly like a... Instantly, right? Instantly, then they can request for the physical card, right? Okay, okay. So like, I tell my friends saying that we are the real digital India.
00:43:20
Speaker
So, per day, we usually create business proof and other, usually like 80 to 100, we are creating new business proof and other card. Okay. Business proof and other must. Okay. And we create a business proof beyond boredom. Okay. Then we usually take their back account to settle the payments to their back account. This is our journey, our FSC journey.
00:43:43
Speaker
And if they don't have a bank account, then you create a bank account also for them. Okay, so right now they must have a bank account. Okay. The next process, next product is going to be like a create a bank account. So we partner with couple of banks. Okay. And we partner with some Tamil Nadu focused bank to offer a bank account. Okay. Okay. You said you issue a virtual debit card.
00:44:06
Speaker
Yes, exactly. In the roadmap? In the roadmap right now, okay. Okay. So, the next product is going to be the card, you know, like prepared our debit card. So, the money will reach out to their debit card and they go to ATM withdrawal, they go to another merchant to swipe.
Future Vision for Ipope's Marketplace Model
00:44:22
Speaker
Because we are going to build a community-based marketplace where they can trade themselves in the platform itself. So we will offer a card, money will reach out to their card, they go to another vendor, swipe, you know, again, if they offer a pause machine. So we are planning to create some rewards program kind of stuff.
00:44:45
Speaker
You've launched a post-machine also? Yes, we partner with Wordland to launch a post-machine. How do you make money? Because QR code from my understanding is QR code doesn't make money, you do cross-selling. As you know, we can't make money from the transaction. We can only make money from the lending side. In Tamil Nadu, those sector tier 2, tier 3 villages, there is a method called Thandal.
00:45:15
Speaker
The people, the local people, they are not NBFC, they are not licensed holders. Local people offer money, and they collect every day.
00:45:27
Speaker
So, technically, they charge around 60 to 70 percent. Interesting. Okay. So, daily collections, people will come, stand in front of your shop, you know, like, hey, give me money, like, collection, like, 100 rupees or 100, 2000 rupees usually, right? So, we want to help them
00:45:49
Speaker
to get rid of all these problems. So, we partner with the NBFC. We are not NBFC yet. We are in the process to get our own NBFC. Until then, we partner with other NBFC to offer a loan to our merchants. Same thing, we also collect daily basis.
00:46:09
Speaker
Okay. Our merchant should walk with us at least three months. Now we have a data. Okay. So we launched a ledger in the application itself. Okay. So even we can track if you have any cash transaction based on all those data, we pass it to our NBFC partner, they will decide and they will lend the money directly to our merchants. That's how the digital lending guidance says, right?
00:46:35
Speaker
Since we deployed our QR code, we collect daily basis. If it is 500 rupees per day, you know, the first 500 will go to our lending partner directly, rest of the money will settle into our merchants. Okay. The second revenue model is going to be insurance. So what we did was we are not only offer insurance to our merchants, we help our merchants to offer insurance to their customers.
00:47:04
Speaker
Okay, thank you merchant and insurance agent. Exactly. We tell the merchant, this is the product. You have the customer, you sell the product to the customer. Let's share our revenue. Then next, what we are going to do, we are going to offer a digital gold. Because here, gold is missed traditionally in India.
00:47:28
Speaker
Savings, basically. So, we build the same way like insurance. So, we tell the merchants... Digital gold, you must have tied up with like... Yeah, exactly. We are telling your merchants. So, whenever you give change to people, why don't you offer gold for the changes? Some people are buying something for 90 rupees, they offer 100 rupees. 10 rupees, why don't you offer gold? Then this becomes a culture, right?
00:47:58
Speaker
Okay. So, whatever money we... like basically your merchant becomes a gold reseller, a digital gold reseller. Yeah. So, we make margin. We share with our merchants, you know, because the merchant will need to do some KYC. Of course. Yeah, definitely. So, through the Epope app, they can... Through the Epope app, we are under RBI. We know like we are regulated. We want to make sure that every step we are stepping should be regulated properly done, you know.
00:48:27
Speaker
So obviously, like we do KVAC for the merchant, for the reseller, we do the KVAC for the consumer also. But that KVAC part, because my ultimate aim is to help our merchant to make money through us. I'm not trying to make money from our merchant. I want to help my merchant to make their own money from their merchant, from their customers.
00:48:52
Speaker
That's how we built our relationship. That's how I told you, when I became an entrepreneur, I really wanted to give them a real solution. That is why we call it as a verticalized payment. When we chose a vertical, we wanted to go into deep, understand the real problem and give them a full-stack solution.
00:49:10
Speaker
Okay, okay, interesting. I want to ask you a couple of questions on some of the things. So you said you have a ledger for the merchant where he can track cash transactions. So that's something like Kata book, okay, credit kind of a product. Exactly. Like they can send reminders through WhatsApp like this payment is due. Exactly, exactly. Send a payment link for the person to make the payment through UPI or something.
00:49:35
Speaker
Correct, correct. You know what, if you are running a small retail business, you are providing one app solution for everything. You can use our QR code.
00:49:49
Speaker
the transaction coming in, you can use our ledger to track. We have our own point-of-sale software inbuilt where you can keep all the stock, you know. And for the payout also, we are providing a new bank where you can add another vendor as a beneficiary, make payout, and we are going to launch a GST-based, we are going to launch invoice-based, it's going to be an upcoming product. The end of the day, the reconciliation will be very simple. You know what you have in your packet right now.
00:50:17
Speaker
Okay. Okay. I understood the past product also. So you probably also have some sort of a CRM then for the ledger and for tracking which customers have to pay and also for tracking which customer bought gold, which customer bought insurance from the merchant. So the merchant would have some sort of a CRM in the app also.
00:50:35
Speaker
So Madchan have their own CRM, and even for that, we have our full dashboard, so we can track what kind of Madchan, how much to transaction. If we are getting alert, if anyone is eligible to get a loan from us, because we offer 30,000 to 2 lakh rupees worth of loan,
00:50:58
Speaker
Okay. So we have the complete CRM in the backend to keep tracking, even, you know, like track the ledger, send them a reminder, insurance, all those stuff. So the person who's buying insurance can come back to the same merchant for paying the premium next year, or for seeing how much is his digital gold balance for taking cash instead of the digital gold. All of that he can do with that. Yeah, he can do. And we have our own support team.
00:51:23
Speaker
to help their merchants because we have the complete record. So I want to share something about our support system. When we started offline, I first 50 merchants onboarded by me. I personally go to because I'm a foodie, I go to the restaurant. So wherever I know people, I usually go and onboard the merchants. So one of the merchants told me, go on, you know something, I am using Google Pay.
00:51:50
Speaker
So, he said, Google Pay or UPI have some issues. So, whenever we got checked, we usually call Google Pay customer support. Most of the time, they don't pick up. And even if they pick up, they speak in English or Hindi. How do you expect me to speak in Hindi, English? We are completely uneducated. How are you going to solve this problem?
00:52:16
Speaker
Then that triggered me something. Actually, very next day, I placed a Tamil-focused call center at Deepak. So, in Tamil Nadu, if anyone called our support team, we say like, that means, how can I help you?
00:52:33
Speaker
Okay, so when this kind of... because they are using QR code last two years actively from our community, maybe three years, right? When they had first time someone speaking our own language, they said, wow, this is the company I should work with.
00:52:47
Speaker
Okay, because fintech is all about trust. So, I want to launch the same concept for every state. We should focus differently, vernacular focused for the support. So, now we are trying to automate the complete support, even vernacular side.
00:53:05
Speaker
Google Pay has a support where you can call, is it, for merchants? Try, you know, you can try yourself. I thought these payment apps were like pure online. If you have a problem, then you did it on the app only. How do we expect, you know, like send a ticket?
00:53:22
Speaker
from the postcard vendors, saying that my payment card stack is impossible. This payment not getting processed is a pretty big challenge. The payment could be maybe like 20 rupees to 200 rupees, I'd say. But for them, this is the main. Yeah, exactly. They are doing like 1,000 to 1,500 rupees every day, this kind of postcard vendors. It's a very big for them.
00:53:51
Speaker
how do you do credit and the writing? Because I'm sure these people will not have a Sybil score. Yes. Okay. So obviously like we do unsecured loan right now. Okay. We have the complete KVAS of the merchant number one. Yes. Okay. So we do have our own credit analyst. Okay. Saying that if someone is doing
00:54:11
Speaker
2,000 rupees per day, they are making 60,000 per month. Of course, they can definitely pay 200 to 300 rupees per day. Based on that, we say you are eligible to get 30,000, 40,000 rupees. Once they cleared our credits check, then only we passed our lending partners. And the lending partners are comfortable giving loan to people without a bureau. They do their own check.
00:54:35
Speaker
Okay. And the way we build a relationship, you know, they trust, but they'll do all the check. Then only they approved. We have multiple partners. Right. So we have around seven partners. So each one have their own like credit score. Yeah.
00:54:51
Speaker
So, what percentage of your loans are given to the new-to-credit segment, like people who don't have a credit bureau score? Right now, 100% is going to the unsecured side. No, but out of these, how many are new-to-credit partners? Correct. So, in those cases, the percentage is different.
00:55:12
Speaker
Okay, so we do him and that all those stuffs because we can give, you know, the collection is very important, right? Right. Okay. How do you train the merchant? Because you are almost like a neo-bank for the merchant, whereas you are allowing him to sell insurance and sell
00:55:29
Speaker
sell savings which is digital gold and you're giving him loan also a lot of things which banks do so how do you train a merchant on how he has to sell insurance how he has to do the KYC for his customer and if the customer comes with a complaint how he has to do customer service for his customer okay so this complete credit should go to our FSC okay so when we hire FSC we hire from the local area
00:55:57
Speaker
So, this guy is already familiar person in their street. So, of course, I do agree with you. The education is the toughest part.
00:56:07
Speaker
for us. Since we are our own full-time employee, we go and sit with them. Sometimes they are very busy, the store is very busy, they have customers. So that is the reason we want to build local people. They know when the store is crowded, when it's not something. So we go and sit with them. Luckily, we have a very good app tech side. We have our own Tamil vernacular app itself.
00:56:34
Speaker
Okay. We help them, we sit with them and educate them. The best part, you know, they love to learn. Whenever they see the application, they see technology, they want to know more about that. Okay. And sometime, you know, like since we have our own call center, Tamil call center, they call our call center. Hey, how this work? How that works? I'm stuck with this. Can you help me to understand? Can you tell me to release this? So the education is tough, but we are getting better and better every day.
00:57:04
Speaker
Okay. What is the kind of NPA rate you've seen so far in your portfolio? Okay, so since we have our own risk check, once we clear this, then they will have their own check. So right now, we are definitely in the very early stage of lending, we start keeping our days. How do you guys have been since you started lending?
00:57:27
Speaker
We are doing like last four months. Okay. Very early stage. Exactly. So the market ratio, if you keep anything under five percentage is really good. You can go up to 10. If you go more than 10, you are finished.
00:57:46
Speaker
Yeah. Right. Right. Okay. Okay. And for this lending, your earning is like a sourcing fees. The lending partner gives you a sourcing fees. Exactly. Exactly. We make percentage. We make percentage. Okay. Percentage of the loan dispersal. Exactly. And what is your monthly loan dispersal? Like what's the current revenue? So right now, we are doing our own less than a crore.
00:58:10
Speaker
per month. As you know, we are also learning. We want to be very carefully lend this money to the merchant, because unsecured, most of them are postcard vendors. So, according to the question, it's less than a crore, but we are getting good. We are getting better.
00:58:26
Speaker
Yeah, if you scale up too fast, you'll end up with a high end period. Exactly, exactly. What about for insurance and digital gold? What is your monthly premium collected or digital gold? Digital gold, we are in very early stage. But insurance side per day, we are doing around 80 to 100 in insurance we are selling. Wow. And this is what like health insurance policies? Health, shop and vehicle. Okay, vehicle insurance is a very big market.
00:58:56
Speaker
The buskal vendors, they usually do everything via small bike, you know. Almost each retail offline business has a bike. And this is through a partnership with someone like, say, Renubai or someone like that. Yeah, we partner with insurance. We are partnering with Star Health. Oh, okay. So in the long term, when you are a pan-India player,
00:59:21
Speaker
What would be like, what do you foresee or what do you predict will be the revenue contribution from these streams? Like you have one stream of insurance premium, you have a stream of lending and you have a stream of digital gold. What do you think will be, and will there be new streams of revenue also? Yeah. Okay. So the idea is to create multiple chains.
00:59:42
Speaker
But we will go step by step. So, I'll tell you the company point of view instead of talking about the revenue side. So, you know, phone pay, Paytm, Bharatpay. So, my focus is very simple. I'm not saying that I'm going to be the number one next for years.
01:00:01
Speaker
I'm going to be very practical. Even a third place, fourth place in India is a pick. I'm happy to pick myself the third player or fourth player in India in four years. That's my target. And another thing, we still want us to focus TA2, TA3 rural area.
01:00:20
Speaker
We will be the market that I can assure. We will be the market leader in Tamil Nadu for sure. We have around 380 people overall in Nepal Bay. We have offices in Bangalore. We have offices in Mumbai. I want to give at least 3,000 job opportunities to people. I still want to hire more people from day 2 to day 3. I still want to do our own FSE. These are my targets.
01:00:46
Speaker
Right. I can give you the very fancy answer also, Akshay. I'm going to be the IPO next four years. Wow. Amazing. What I want to understand is these three revenue streams, are they it or are there other streams also? Will you earn on transactions? Okay. So we will make transactions from the card.
01:01:05
Speaker
Okay. Okay. So we will, okay. We are, I'll tell you first lending insurance, gold savings. We will make revenue from pass. We'll make revenue from a sound box, which is very good revenue model right now. You know, monthly rental sound bugs. The PTM was a pioneer of that. Yeah, pioneer up one day now. So the next, we are going to focus in the transaction, not UPI for the card.
01:01:34
Speaker
Okay, so we will make money from the interchange. So right now, people are saying that the credit card, I strongly believe like credit card, they will keep their market as it is. NPCI, RBI focus is to eliminate the cash, not the card transaction. They launched a UPI to eliminate the cash transaction.
01:02:00
Speaker
Okay. So industry talks in future, maybe like P2M, the merchant, right? They may charge interchange rate from the UPI also. Maybe like I am projecting, maybe this happened after two years. But there was already some notification about credit cards. Credit card connected with UPI.
01:02:18
Speaker
Okay, but there was also something for merchants above a certain value or something like that for a UPI payment. It's not implemented. Again, that is for the credit card kind of the UPI. How will that marketplace be monetized? Like you will take a fees for listing or you will take a transaction fees? Sorry, we won't definitely charge.
01:02:42
Speaker
fees for the listing, we will only charge from the successful transaction. Even, you know, the B2B is always work with the credit base, right? Okay. Okay. Okay. Okay. This B2B marketplace is like a completely different beast. Will you do everything that Udan does like logistics also? Okay.
01:03:04
Speaker
So no, we don't want to focus on B2B concept, right? That's when I clearly mentioned that community-based, it's going to be like nearby. So logistic is not my concern at all. Okay. Okay. So that is why I said community-based, you know, if someone is offering a better product, better price, I'm ready to go to the next sheet. I won't go to the second sheet, third sheet. I know this industry very well. That is completely different beast. They handle logistic, they handle shipment and everything.
01:03:34
Speaker
Okay. Got it. And what do you think will contribute to, which will be the top three contributors to your revenue? Will it be like insurance or lending or like, you know, what will be, probably lending the number. Lending is going to be the number one. Okay. I want, I want, I specifically want to bring this marketplace to the second place.
01:03:56
Speaker
It is very hard. It will take a lot of time. I want it to be a third is definitely insurance. Okay. The car interchange, gold sound box is all will place the next step. Okay. Okay. So I'm wondering how you are funding the business today. Are you profitable right now? So actually, you know, like, as I said, we are a vertical, right? So we were talking about SME vertical. We have another vertical, which is online business.
01:04:25
Speaker
Okay. So we make very good revenue from there. We still keep that revenue stream. Okay. We make very good revenue. And now we are building an infra business. This is another vertical. We are building our own switch. We are building an expense management. This product will go to the banks. The majority revenue right now comes from the online business only.
01:04:50
Speaker
Okay. So we have a good runway. So now everyone is talking about the runway nowadays in India. So even if you go zero to revenue, we have another 30 months of runway. Okay. Amazing. So let's say this is like your corporate business. So in this corporate business, one is of course you are earning through payment gate fees.
01:05:13
Speaker
Then you said you are building some other infrastructure, like a switch. What is a switch and how does it earn money for you? Okay, switch. So there is a bank connected with Visa Master. So bank has a bin. There is a technology called switch where you can connect a bank with the Visa Master.
01:05:33
Speaker
So purely technology. Okay. So that's like electronic data interchange. Exactly. Okay. Exactly. You're right. You know, like banks, you know, we are helping banks to speak to the card. Card providers. This is such an old industry. There must be already players doing this. Like why do you want to get to it? You know what I'd say? Like this is a very old technology. Okay. So when we are into payments, right? So I'll put it a different way, right?
01:06:04
Speaker
This question is asked by many people nowadays. On one side, you are helping the ruler area. On the other side, you are building a product for the banks. It's not matching. I was reading about Amazon. When Amazon is getting familiar when they scale up their business, they could not scale their website and application because of the server.
01:06:30
Speaker
Then they decided to start their own cloud, AWS. Look at the combination. Selling goods are books. They said they are building a cloud-based company. There is no connection. When they decided that there is a scope for cloud, because when they started AWS, they started only for them.
01:06:53
Speaker
Yes. Okay. Amazon was the internal customer for AWS. Exactly. The penetration for the cloud, right? We are also using AWS. Right. Okay. So, I was just implementing the same story to HippoPay. HippoPay is an amazing kind of company in India.
01:07:14
Speaker
Correct? So when we work with banks, we realize that there is a technology called switch. We should partner with switch providers and we should share our revenue to them too. Okay. Okay. Then why don't we start our own? If there is a revenue stream, even though it's small, then we decided to build our switch in-house. We partner with the bank. Now we are going to use for our own, then we distribute to other vendors too.
01:07:41
Speaker
And this switch market, is there some scope for disruption in the switch markets? Definitely, there is a scope. Luckily, this product is a global product. It's not an India-focused product. That is a very good market. When we approached, when we were running a payment gateway, we understood that one of the biggest vertical education side
01:08:08
Speaker
My education, you mean edtechs? Education in the sense college and schools. So now we have a switch, we have our own card. Why don't we offer this card to the students? So now we have a lending product, lending partners. We are going to be the NBFC. Why don't we lend?
01:08:29
Speaker
to school fee for the students. Okay. So we see opportunities where we can campaign our product as a single product. Okay. So that is the main reason we started switch business. Okay. So for education, you also acquired a business, right?
01:08:48
Speaker
Yeah, we invested. We have the majority share in the company, which is called IPD. What does that do? They offer ERP solution for the school and colleges. For managing admission and fees. Exactly. End-to-end. Our tenants do exit. So we invested and they are using our gateway to process events. Next, we are going to walk together for offering a card, offering, as I said, loan for the tuition fee, all those stuff.
01:09:17
Speaker
Oh, okay. A card would be like a, say in college, you spend money on photography or canteen. So within the college tech shop and a photography shop and all will start accepting that card. So that's exactly for campus life, basically. Exactly. You've done more acquisitions also, right? Besides this iBuddy. We acquired a company called Twitler. Okay.
01:09:43
Speaker
The reason we acquired, because when we are running an online payment gateway, a risk factor is very important. Whenever we talk about a risk, you know, some foreign companies come and solve. So, recipe using cyber source, cash-free and other companies are using some foreign companies. Okay. Give me an example of what is the risk? Okay. Risk, the transaction risk, fraud detector, you know.
01:10:09
Speaker
Like someone using the stolen credit card. Stolen credit card, someone using, try to steal fake transaction, all those stuff, you know. Okay. So, when I was running online business, banks forced me to take a risk management product, you know. Without risk management product, bank won't work with this, right? Okay. So, now there is a dependency.
01:10:36
Speaker
I must work with any third party company, okay? I must have my data, I must have the revenue to them. Then I decided to build our own. That is why I keep telling, you know, like we are like amazing kind of company, right? Then I came to know, Twitler is a Chennai based risk management company. His name is Mr. He walked in risk class 15 years. He walked from the banks, he walked from EBS, highly experienced person in the risk side. He was building a product Twitler.
01:11:05
Speaker
and he approached him for the investment. Then finally, we said that the story was like similar, both of their stories. Then we decided to merge together. Now they come to Popey, you know, like we occur them. We scale up the product. We scale up the technology. Now, like we are going to use Twitler for our own. Then we are going to distribute to other businesses. Luckily, like we got some
01:11:29
Speaker
some high-level aggregator interest to use to declare. We got very good interest from the UAE market. Banks are very interested in Africa too. Amazing. When I started Ipope, I needed risk.
01:11:47
Speaker
Okay. I need a school. That is why I combined everything at one place. Right. So these companies are being run independently by the founders or like are they birds and everyone sits in the same office or like how deep is the integration? Everyone sits on the same office. They are also here. They are not running independently. They are running under repo pay only.
01:12:12
Speaker
Okay. So HR and finance. All finance, all there came into our runway. All those steps. Okay. Amazing. So, you know, my final question to you, what's your advice to young aspiring founders, people who want to build their own business? So, you know what I'd say? Till now, the last one and a half years, I invested into more than 25 startups.
01:12:42
Speaker
Okay. As an angel investor. As an angel investor. Okay. What sector is you invested? I was buying the sector actually. Okay. So, there are 14 deals by angelists. Okay. Rest of them are direct. So, when I started Ipope, you know my struggle, right? To rise first. When I got the first check, you know, things were changed, right? So, everyone was waiting for the first change, right?
01:13:12
Speaker
Though I decided saying that, why don't we help the early stage startups offer a small capital, you know, and my advice, my mentorship, all those steps, right? So technically I invested, I think around eight to 10 startups in Tamil Nadu and others are Angelist, other states too. Okay. So in Tamil Nadu,
01:13:37
Speaker
There is an organization called startup TN, it's very active. They are helping a lot of startups come up with it. This is a government organization. Okay. So I usually tell, you know, nowadays the colleges, you know, call me for the speech, right? Whenever I go to college, I say like, why this, you know, too much hurry to start your own company. If you don't have 10 lakhs rupees, please don't even think about to start your own company.
01:14:03
Speaker
Okay. Spend three lakhs to build a product. Build an MVP. Spend another two lakhs to form a company, form a small team, form a digital marketing guy. Keep this five lakhs rupees for the next six months. Right. First six months, you should dedicate 10 lakhs plus one year. First three months, build a product. Second three months, like go to the market, create a small transaction. Rest of the six months, you should dedicate for the scale up.
01:14:34
Speaker
If you don't have 10 lakhs, please wait until you make 10 lakhs. There is no hurry because I started ipope when I was 36.
01:14:45
Speaker
So whenever I go to college, I say, like, Anna, I should start my own startup next month. What should I do? I should ask them, how old are you? 21. So I advise colleges saying that, like, you are running a fine-lear education. You should run your own startup incubation. Cold one year. So I tell students that if you want to fail, fail at the college.
01:15:14
Speaker
Yes. Right. If you are running a startup for a five year student, if you failed, I promise you, you'll be the best employee in your next organization. Absolutely. Okay. So go work for two years, three years, learn the process, learn the technology, learn the finance, build your own confidence. Now do something for your family too, right?
01:15:40
Speaker
Make some savings, help your parents to have a steady lifestyle, then go for a trip. Amazing. Do you plan to continue to bootstrap or do you want to raise more funds? The idea is to boost up for the next one and a half, two years. The market situation is very bad. We may go to market after 14 to 15 months. I strongly believe that if you want to scale, you should have capital.
01:16:09
Speaker
So that's the power of money. I may post that for the entire Tamil Nadu market, but I definitely need funds for... Okay. Amazing. Let me stop. And that brings us to the end of this conversation. I want to ask you for a favor now. Did you like listening to the show? I'd love to hear your feedback about it. Do you have your own startup ideas? I'd love to hear them. Do you have questions for any of the guests that you heard about in the show? I'd love to get your questions and pass them on to the guests.
01:16:37
Speaker
Write to me at ad at the podium dot in. That's ad at t-h-e-t-o-d-i-u-m dot in.