How Rupifi CEO Anubhav Jain grew to $1.9M revenue and 15K customers in 2024.

hey folks my guest today is anubhav jain he's building a tool called rupify it's embedded lending an sme bnpl he's an entrepreneur angel investor and credit risk professional with a decade of experience in banking consumer small business lending including credit cards loans all across the life cycle underwriting acquisitions etc anubhav are you ready to take us to the top yeah i'm really excited all right so talk to me give me the paint the persona of the consumer who's taking capital from rupify usually yes we are in the b2b space so we essentially work with b2b marketplaces so our customer here uh is a small business and these are the mid to long tail of small businesses uh right now in india but it could be anywhere in the globe across the globe so uh this is a very small uh like a shopkeeper or a retailer or a or an sme who's looking to let's say go to a digital b2b marketplace or an offline b2b uh kind of a distributor and source his inventory or goods uh and because there is a certain credit cycle in which the they are able to sell those goods uh they need that working capital in the form of a credit or a line so we provide that credit line to to these small businesses uh just to give you uh some idea about these businesses they are typically uh less than uh let's say twenty thousand dollars of annual turnover so they're really really small guys got it and are you is are these loans sitting on your balance sheet or are you a marketplace you're passing these loans off to somebody else we are a managed marketplace so this does not sit on our balance sheet we work with a lot of banks and non-bank institutions uh across the country where we have a revenue and a risk sharing arrangement with them so that we onboard these customers we provide the best customer experience we have the technology it's a fully embedded product that we provide focus being we do the customer acquisition we do the underwriting we do the collections but the balance sheet is provided by the lending institution i see and how many small businesses have taken at least a dollar through your platform so as of today we have close to around 25 000 odd small businesses that have transacted with us uh we've been growing at more than 200 percent month on month for the last quarter or so that's revenue or loans done that's great when did you when did you launch the business so we launched in july 2020 it's been almost 10 years so the first uh and because this is b2b we go uh by vertical so we start with fmcg vertical we scale that we learn about that segment then we go all out which sector did you start in we started with fmcg what is that so fmcg is basically all fast moving consumer goods like grocery or all your retail products which are being used on a day-to-day basis uh fruits vegetables grocery items after that we launched in the pharmaceuticals and healthcare then recently we started with agriculture we're also present in fashion and electronics interesting take me back to some of those first loans done the fmcg factor fast moving consumer goods what was the average loan side and help me understand some of the terms sure so an average credit line that we approve for these small businesses is uh something of the order of a thousand dollars right and that thousand dollar they utilize over multiple transactions so the average transaction size for us uh can be as low as uh hundred and fifty dollars and how do you guys make money on that yeah so this is a very short in your transaction uh it's typically for like 14 days 30 days maximum 60 days and we make money through the supplier so it's a zero percent interest or a zero cost credit to the retailer but because we have acquired this retailer through the distributor or the b2b marketplace so the b2b marketplace basically provides us a fee right uh over every transaction that happens on their platform where rupe5bnpl is being used so it's almost like the seller or the merchant is providing us some kind of a discount revenue you know the way you use a credit card and you get paid by the merchant the same way uh when you use groupify bnpl the user does not pay but the merchant pays so let's just make this real i'm a grocer in india a small shop owner i use you guys you know earlier this year i take 150 from you and you say okay nathan you have to pay that back in 15 days do i pay that back daily or do i just pay 150 bucks at the end of 15 days up to you you have full flexibility okay you can pay daily you can pay it in part payments you can pay all the amount after 15 days and if you give me 150 today and then i pay it back in 15 days and i only pay back 150 that's how that works right why wouldn't people i mean where do how does how do people make money there's no there's no spread sure so what happens is this 150 does not come into your bank account it basically goes to your supplier and you get goods against this 150. so we are only helping you buy your inventory from your supplier so we charge that a certain percentage from the supplier because now we are helping the supplier increase their sales by offering bnpl to these shopkeepers got it okay and what's the fee typically like on 150 bucks what would it be it would be two percent so two percent okay so let me just play this back to you i as my local shop owner get my bananas from banana company uh i know i need x amount of bananas i'm you're gonna give i'm gonna say hey guys i want to get 150 bucks send it directly to my banana company that banana company is gonna pay you guys a hundred and uh three what is it three dollars so two percent of 150 bucks yeah correct i see and then they're getting the cash up front it's better for them they don't have to wait for me to pay them and then the whole cycle goes faster yes so so this banana the retailer is now going to order more because he has 15 days of credit cycle so he can make more orders using groupify so that the overall sales of the banana company goes up because of the bmw i see yeah that makes sense so so okay so over the past i guess last month how much capital did you put out so uh so we've done close to seven and a half million dollars of uh lending uh this month in september right uh and it's festive season coming up in india next month so we're looking to almost again double this in october now can can i take if you lent 7.5 million out and you take a 2 fee on average that's about 150 000 in revenue now are you making that or is your balance sheet partner making that so uh so we share that revenue with the balance sheet partner so we get all that revenue and then there is a certain share of that that we give to the balance sheet partner and remaining we keep it's almost like a 60 40 split you keep 60. uh no they keep 60. okay balance sheet gets 60. so so got it so 707.5 million through two percent fees 150 k you know they keep uh 60 of that so they're keeping 90 grand and then you're keeping call at 60 grand some 60 000 yeah that's impressive so you guys are doing about 60 000 a month right now in revenue yeah absolutely wow okay and that's up from i mean where was that a year ago do you remember oh a year ago we had just started because we were we were just in our first uh couple of transactions at that point uh but i can say that three months ago this number was uh five thousand dollars so we are almost 12 10 more than 10x uh in in a quarter wait sorry what was it you said in may it was how much in in june this was five thousand dollars that was your revenue five thousand wow it's gone uh more than 10 times well so if you're doing 5k in revenue what was total gmb in june um that was close to around 100 000. well so you went from 100 000 loans done in june to three months later you're like it's 7.5 million loans done in the month yeah what would you credit that growth to so uh i think it's a mix of uh a few things fun we've kind of now expanded to some of the very large players we work with a couple of the largest b2b marketplaces in india can you name a couple of those yeah so we work with the flipkart walmart group uh so all the walmart stores in india we are present today i see entire flipkart uh e-commerce platform on the b2b side we are present today right so uh so those are some of the very large partners that we work with do you own the relationship with me the shop owner do you have my email address you have my information or do you just own the relationship with the banana provider we own both so the beginning to begin with we go to the banana provider they tell us that hey i have these many customers can you provide them a bmpl option once they provide those details with us we get a consent from the from the individual shopkeepers we collect their data we get their kyc done we offer them a credit and then now i i have complete ownership of individually all those sme customers i see so the seven point five million loans in september how many okay how many pounds was that across up sorry can you repeat that yeah of the 7.5 million loans you did in august how many smbs was that across that must be around fifteen or thousand uh fifteen thousand yeah wow okay got it now um how do you go i mean how do you grow this thing right so how do you go to like you know a hundred million out each each month yes i think a few things one we continue to work with some of the largest uh b2b marketplaces in the country uh so so that's something we will continue to do across sectors we'll get the largest partners so for example there are a lot of large b2b marketplaces coming up we go to them we embed rupify on the checkout page of their journey so whenever a new small business comes and transacts with them they will always see rupifi as a payment option or a checkout option that's number one the number two is we want to convert this online offering to an offline offering as well so we want to offer this even for a small business which enters let's say a cash and carry store and they want to make this transaction using credit at the point of sale so we are now launching an offline bnpl as well so we want to be omni-channel and i think in the next couple of years that's where we would be and have you built all this boots chapter have you raised we raised uh we raised a couple of rounds so we started with a with a precede from some of the well-known angel investors in the country and then we raised a pre-series a uh from couple of financial uh financial investors uh back in march so so yeah and we've just raised a venture debt last week okay so in the pre-seed round in 2020 how much was that for that was a little less than a million and earlier this year we raised a pre-series there that was around four million dollars okay interesting i'm curious what the four million what valuation was that at uh we've not disclosed that but uh very standard series a uh well that's actually why i asked i'm not sure i mean are you seeing the same multiples in india that we're seeing here in the states like did you sell what 15 20 of the business for four million something like that yes something like that yeah okay got it got it so you're talking like i mean i won't push too hard here but you're talking like something between like a 16 and 20 million dollar pre-money valuation absolutely yeah i see i see and and where were you uh what was the valuation on the million that you raised last year uh again uh that was also at an idea stage with not a single line of code written so uh between 10 to 15 dilution there got it got it yeah then you're typically seeing those rounds be like you know four to six million sort of range you were in that range yeah got it and flesh out the team at that point i mean it was just you and a co-founder or how many co-founders you have i have a couple of co-founders so i look at the financial aspects of things because being a risk guy i try to manage all the other risks collections sort of things i have a couple of co-founders one of them was with google core technology guy uh he worked with google for nine years in google docs google spreadsheets oh wow and machine learning so so he looks at technology and i have another co-founder who worked with a lot of indian startups scaling their products so he's the product guy so the three of you gfs did you guys are you friends you just put the equity 3333 yeah it's a it's an equal split between the three of us oh very good okay that's that's a great that's a great way to do it okay cool and then talk to me a little bit about the venture debt round you just raised how much was that for again uh so venture debt is typically bagged uh with an equity round earlier so so we raised a four million equity and uh in india it's uh when you raise x equity you get 25 of that in venture debt so this is a million venture debt yeah interesting what what bank did that was that svb or what's the equivalent to suv in india uh so this was not from an svb equivalent but uh one of the top three venture debt funds so uh yeah interesting was the cost to capital net under 10 no really it's it's it's a little higher but i think considering uh the cost of capital that we would get from a bank uh it's uh it's very much in line with that so if we were to borrow from a bank uh unsecured today uh i think we'll not get it uh at a rate lower than what we are getting from the vengeance interesting from the venture debt fund uh did you have to give them warrants as well yes it's a very standard warrant's interesting i do i you know i see i don't know what our standard warrants are anymore i see them all over i see ones low as one percent and i see some as high as like six seven percent warrants where were you guys uh no we were in the [Music] yeah in the one percent range okay so you already got it i would say that's a good deal then so it's a one percent but cost capital more than 10 percent uh from an indian sort of credit fund effectively yeah interesting what are capital markets like in india right now for this kind of things i mean can you go raid if you want to start doing this off your own balance sheet could you go raise 100 million bucks at seven percent and start lending this money directly uh it would not be easy because uh the cost of capital if we were to do this on our balance sheet would be fairly higher so uh but i think the good part about that is that you would have good flexibility in terms of how you run your balance sheet because today when we work with banks and nbfcs we don't get 100 flexibility in the kind of segments we want to go after and the kind of processes we want to run so banks have a lot of controlling power on that but uh i think if i were to do this with my own balance sheet it would have been at least 300 to 400 basis points higher in terms of mass so i think we really it's it's all about uh what do you want to optimize for on day one do you want to optimize for fast you want to optimize for for risk or do you want to i know you have such a good model right i mean because for a couple reasons one uh this is effectively a loan product with a very quick payback 14 to 30 days you know most loan products are like a year 12 months or something longer so you have quick payback you charge two percent so if you charge two percent on a 15 day facility right that's you know four percent monthly multiplied annually that's a 48 effective i you know interest yeah i mean you could definitely go raise capital at under 48 interest and make a spread yeah absolutely so i think that's that's the idea that uh nathan so we'll we'll build our risk models we'll prove that you know uh what we're doing this works uh then we'll apply for a license sometime raise our own capital under our own balance sheet and you know uh and then maybe do a cold ending or a onward lending kind of an arrangement interesting what's the team size today how many people uh we've recently grown quite rapidly i think if you asked me this question three months back we were 25 today we are around 60 odd people in the team how many engineers uh so the engineering team would be like 17 18 people 18 people interesting uh very cool what about how do you measure churn on this do you just say hey how many of our 25 000 uh 25 000 customers take at least a dollar every month yeah yeah so we keep on looking at how many of the active transacting smes transacted again next month uh that number for us is around 80 85 percent so retention retention retention is 85 uh which is which is i think which is i think uh okay uh at this stage though it should be higher because we are giving them credit at no cost uh but what we also see is that uh churn typically happens in three months after that uh we don't see much john so let's say i acquire you today there will be a 10 15 churn month 2 and another 10 15 month three and month four so that three months we'll see each one but after that the portfolio pretty much remains with you they keep on transacting because because somebody who is transacted for three consecutive months with you they'll transact every month because it's a very sticky product when are you launching a sas product to help these grocers and small businesses run their business that way you have a percentage gmv model embedded fintech and also sas in one shot yeah very soon oh you are good what's this product something a lot of our partners asked for asked for it so this is coming out very soon are you are you more excited about the sas launch or growing the lending business ah that's a tough one to answer i'm actually excited about both right now because both are good experiments for us sas was something we we discussed quite a lot because we just we thought do we really want to be a sas company do we want to be a more a ruby payments company because because bnpl is just a payment instrument right for these these businesses so are we a more b2b payments company where we make money on every transaction or are we a more sas company where we make money on subscription so i think we're still figuring that out we're still just a year old company so we're quite young to to say whether this is exciting versus that is exciting i think all right very good we're out of time let's wrap up here quickly and number one favorite business book say favorite book uh so snowball number two is there a ceo you're following or studying uh i follow i do follow novel novels number three what's your favorite online tool for building the business oh okay so that's super human number four how many hours of sleep to get every night i do sleep quite less so i i sleep like four five hours and what's your situation married single kiddos uh married uh expecting a kid next month oh very exciting congratulations how old are you i am 37 they're 27 or 37 37 37 37 last question what's something you wishing you when you were 20 uh can you repeat that something you wish you knew when you were 20. uh okay um i wanted to be a pilot uh but decided to be a founder rather so what's something you wishing you when you were 20. um i i don't think i follow that can you can you repeat that sorry i mean it just sounds like you want to start a company faster i'm just asking something you wish you knew back when you were 20 years old oh okay something i knew i wish i knew when i was 20 i think that that would be that you know uh speed is the most important thing i hope i knew that at that time that you know nothing is more important than speed in a startup even if you make mistakes but if you're fast enough that's that's great guys we have at rubify.com giving lending instruments to small businesses in india they did caught 100 dollars of loans three months ago but last or this month in our last month in august they did about 7.5 million they make 2 percent on that so 150 grand they give 60 of that to their partners their balance sheet partners right so call that 90 000. they keep 60 000. so they went from basically 5k a month in revenue to 60 000 a month in revenue in the past six months they're growing very quick raised a seed around last year standard terms a million raised you know caught around a five million valuation raised another four million this year as they continue to scale they sold to call 10 to 20 of the business on that round now a team of 60 as they get ready to launch their sas product on bob thanks for taking us to the top yep thank you so much this was super fun and thanks for having me on the show one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathan lacka dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this 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