Rubique, an online marketplace for financial products had been referred to us by a large investment banker in 2016. The company had previously raised a round from prominent venture capital firms such as Kaalari and YourNest. The positives at the time were that the company was achieving good traction and was run by an experienced team that knew the pain points of loan sourcing.

We would get queries from numerous fintech companies in 2016, with a majority of them not knowing what they would do after a year. However, in this case, the company deck had a clear path of what it wanted to achieve.

The factors for us to pass on the deal were that as an investor we always came in at an early stage. As an early-stage investor we have a ceiling on valuations. Further, by the time we got the deal, the valuation had more than doubled in eight months.

The other factor was that many banks, non-banking financial companies (NBFCs) and housing finance companies (HFCs) did not have a seamless credit-decision making process, slowing down the turnaround time for the customer and eventually affecting the capability of sourcing. The competition was heating up in the space. Our hypothesis at the time was that banks, NBFCs and HFCs will take long to reach a binary decision.

We realize that in the prime-lending market, companies such as Rubique have forced financial institutions on the technology path, enabling them to reach consumers faster and with a more efficient process, and over a few years, marketplaces will have enough data to guide institutes in deploying funds in the correct geography.

Our learning from this was that we underestimated how reliant NBFCs will be on data from these platforms and that they rely on them for credit information and data.

Rohit Chokhani is principal founder of Mumbai-based seed-stage investor White Unicorn Ventures.

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