Online financial services marketplace BankBazaar is set to become profitable at the operating level in the current fiscal and plans to go public in the next few years.
“We are on track to achieve Ebitda profitability for FY20…and now that we are hitting this target, we are still looking to do an IPO in the next few years...by FY22," CEO Adhil Shetty said in a telephonic interview.
The BankBazaar website saw a spurt in organic traffic, or visitors who land on a page through Google or other search engines, between October and January, which drove the company’s registered customer base to more than 40 million users, Shetty said.
BankBazaar also saw an average 46% increase in monthly revenue and a 17% reduction in costs in the four months ended 31 January.
The Chennai-based startup credited the surge in online visitors to the popularity of its free credit score product. BankBazaar started offering free monthly reports and recommendations to consumers on improving their creditworthiness in 2017.
Over the past few years, multiple lending startups are attempting to improve access to credit. While BankBazaar only helps banks and non-banking financial companies (NBFCs) source leads for loans, lending startups have modelled new ways to reach customers with products such as loans for e-commerce purchases, doorstep cash for gold, pre-approved credit lines, and even loans for occasions such as weddings and vacations.
With startups such as BankBazaar and CRED introducing free credit reports, consumers are now armed with greater visibility of their loan accounts and, according to Shetty, more than 75% of BankBazaar customers have a credit score above 700.
Apart from greater visibility on credit scores for consumers, the Reserve Bank of India’s (RBI’s) and banking industry’s push towards a paperless know-your-customer (KYC) rule has greatly benefited lending startups such as BankBazaar. The RBI last month introduced new KYC norms allowing banks and other lending institutions to use video-based authentication for online customers.
“Paperless technology is a game-changer for India and key to the democratization of finance as it drastically cuts costs of operations and increases speed of delivery of the smallest financial product to the remotest part of India," said Shetty.
In FY18, BankBazaar reported revenues of ₹96.4 crore and total expenses of ₹219.2 crore, according to filings with the ministry of corporate affairs. It also reported a loss of ₹109.7 crore in the same fiscal year. The startup is yet to file full-year financials for FY19.