What a year 2020 was 😷. Historic, tragic and shambolic. There is no other way to start reflecting on the year gone by without talking about the insane psychological trauma all our team members have dealt with. It truly is a testament to the human spirit 💪🏻 to see the kind of progress which has been taking place across industries despite a constant cloud ☁️ of negativity surrounding us during these unprecedented times.
The pandemic has exposed the fragility of our healthcare ecosystem. The desperate tweets, WhatsApp forwards, lack of hospital beds, absence of medication, vaccines, and the flood of lifeless bodies are scars that none of us will forget 😿
This will result in 2 things:
A brain drain: A set of folks convinced that there is no point to live in a country like India. They will begin making plans to leave the country.
Second, it will give rise to revolutionaries, a set of folks who will rise from the ashes of this calamity to build scalable infrastructures so that their children never have to go through what they went through 💥
With PharmEasy, I was fortunate to co-found a category-defining company in the Healthcare space. Seeing the turmoil over the last year, though I am confident they will be one of the champions 🌟 we need for this re-build, I am certain they cannot do it alone. We need more players to step up.
Financial Inclusion
The more I think about it, Financial inclusion becomes a fundamental ⚓️ and core aspect of this re-build. We cannot continue to be ok with 90% of India being outside the rails of formal credit. We have built a credit ecosystem that simply apes the West rather than building for our citizens.
One may ask why have banks excluded 90% of India🙀?
Here’s why: Most of India requires and can afford loans of only up to Rs 15,000. Most banks do not sanction loans of less than Rs 100,000.
Why? Well, the cost for processing a loan for a bank is ~ Rs 4000. This includes the cost of customer acquisition, paperwork, credit underwriting cost, etc. The unit economics of a Rs 15,000 loan does not make sense for a bank.
We need a fundamental re-think 🧠
We need a category-defining company in the Financial services space 🚀. The gauntlet has been thrown down⛈!
Without this, we take away any chance of growth for 90% of India. Without credit to build their dreams, they are stuck living in mediocrity
Luckily we have a solution & its called Digital Lending🤖
Using Digital Lending the cost of processing a loan can be reduced up to 80% ⬇️ Further, over the next decade, we will see the rise of aggregators and platforms as lending companies. For them, the cost of customer acquisition is zero. This is a game-changer 🧨 and a rabbit hole we will go down in a future blog post.
Digital Lending Ecosystem
It’s yet very early days in the digital lending ecosystem. Today it’s like 2007 in eCommerce and the Flipkart’s and Amazons are just getting going 🐣
First Fintech companies acted purely as lead generators for traditional lenders with no say in underwriting or collections. The loan products were the same as those offered by traditional lenders🦖. Think of these companies as Fintech 1.0. They were similar to Internet 1.0 companies like Craiglist. Simply connecting 2 parties with no control over the experience.
Now we are seeing the evolution of the ecosystem. Companies are building proprietary underwriting models and owning collections. The financial products offered by them are unique and tailor-made to the needs of their end borrowers 🤩. Traditional lenders with their legacy technology and rigid frameworks are unable to support these products and Fintechs are collaborating with tech-first NBFC’s like Apollo Finvest. These are Fintech 2.0 companies. Very similar to Internet 2.0 companies like Amazon. Connecting 2 parties with strong control over the user experience.
In the future, Fintechs will go 1 step further. Aggregators and platforms will start lending to their merchants to facilitate growth on their platforms. Fintechs will not only control the underwriting and collections but also where and how efficiently the capital is deployed 😯. This kind of growth capital will unlock synergies where 1+1 will equal more than 2. We expect to see a tidal wave of capital 🌊 enter Fintech with such structures and forever change the landscape of lending.
Just like in 2021, as eCommerce has become the default way to shop for many users, the same will be true for digital lending in 2030. By then, the majority of the loans will be processed digitally. Bank branches will be like post offices today 🔮
Our Mission and looking ahead
At Apollo Finvest our mission is the democratization of credit and enabling financial inclusion🤗. Financial inclusion is as basic as electricity and a fundamental pillar to the future growth of our country. We are building the foundational rails for the next generation of lending companies 😻
As for the Apollo team, I could not be more proud 🤗. We went completely remote 🏝 in early March 2020 and have not been back in the office since. We took this call to keep the safety and health⛑ of our team as our number 1 priority but the fact that we have been able to do so without drops in performance is due to the A+ attitude of our team members coupled with the phenomenal organizational skills of our leaders🤓. Despite being a startup, we have always been thorough with our planning, processes, and documentation. We think writing and detailing our ideas brings clarity of thought and makes execution that much easier 📝. This aspect of the company’s working culture has shone through over the last year and helped us operate smoothly in a remote environment.
We have built an incredible foundation so far. In the coming year, we will be focused on building out the team to drive the next generation of 10X growth for the company🎸. This will be in the form of 3-4 key hires 🦸🏻 . If you would like to jump on board this space ship🛸 please reach out to me or apply here
The key numbers to sign off 2020
Finally, to end the financial year, I’d like to thank our believers: Our customers and Investors!
Customers for believing in our platform to build their fintech and investors for believing we would have customers 😹. A lot of you will be surprised to know that we are a public listed company with over 5000 amazing shareholders. This is my first time building a public company and I have been overwhelmed with the passion of our shareholders. Thank you for the inspiration and encouragement. Now, without any further ado, here are the key number’s for Apollo FY21
For the curious, here is our detailed deck 🤓
Stay healthy and stay safe 🙏🏻
Sounds very futuristic though achievable target...very exciting