Paisabazaar, the online financial services arm of digital insurance aggregator PolicyBazaar, has received a funding commitment of $31.58 Mn (INR 200 Cr) from its parent firm EtechAces Marketing and Consulting. This is part of $78.9 Mn (INR 500 Cr) pre-IPO fund raised by EtechAces in October 2017 from True North and IDG Venture Partners.
Founded in February 2014, Paisabazaar plans to use the raised funds to improve its decision-making mechanism and the conversion rate on the platform as well as strengthen its technology.
“We are planning to build artificial intelligence- and machine learning-based systems into our decision-making engines and also introduce chatbots for a better experience of our consumers,” said Naveen Kukreja, CEO of Paisabazaar. He further added, “It’s been an exciting journey for us to reach where we have today. While we have achieved market leadership for lending products, we are at only around 2% of the total unsecured lending market. Our goal over the next 4 years is to reach 10% of this market. We intend to scale rapidly on our savings and mutual funds lines as well. The fresh capital would help us invest further in product and brand initiatives. Another big focus area for us this year would be building new technologies and using machine learning and AI to sharpen consumer experience. ”
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As Inc42 reported earlier in December 2017, PolicyBazaar, along with its lending platform Paisabazaar, is exploring IPO prospects and is planning for the public listing by next year. The company aims to raise its value from the existing $500 Mn to $1.5 Bn through the IPO. Also, Paisabazaar is looking to extend its services like facilitating personal loans, credit cards, and loans against property, to selling mutual funds and healthcare services like doctor appointments on its site.
The platform currently claims to have 6 Mn monthly visitors on the website, which it aims to increase to 9 Mn by March 2018 and 27 Mn by end of FY 19. Also, it aims to increase its business 3x over the next financial year.
In December 2017, Paisabazaar also announced that total assets under management (AUMs) garnered through its Mutual Funds product crossed the $157.9 Mn (INR 1000 Cr) mark last month and they are on track to reach $236.8 Mn (INR 1500 Cr) of AUM by March 2018.
Yashish Dahiya, CEO & Co-founder, Policybazaar, said, “As a group, we aim to transform the way financial services are offered to customers in India, whether its insurance or lending and investment products. Paisabazaar has tripled its business every year since inception. The focus now is completely on creating an unparalleled consumer experience, through technology, innovation, and strong customer service, and expanding Paisabazaar’s reach further.”
As per a market research report by The Ken, the total online loan disbursement in India between 2014 -2016 increased with the CAGR of 68.8%. A major role here is played by web aggregators as they not only offer a hassle-free comparison between available loan options from different banks but also help in the process from applying till loan disbursement in a smooth manner. Similar is the case with credit cards and online investing options such as Mutual Funds.
The major challenge here is lack of awareness and trust among the consumers. However, gradually, with the rise of internet penetration and improved digital literacy among the citizens, the sector is expected to thrive in the coming years. Thus, the recent funding from EtechAces will certainly help Paisabazaar in gaining the required momentum in the burgeoning digital scenario of the country.