WeRize has announced that it has raised USD 8 million in Series A funding round, led by 3one4 Capital, Picus Capital, Kalaari Capital, and Orios Ventures. Founded by ex LendingKart executives Vishal Chopra and Himanshu Gupta in 2019, WeRize is creating a new category in the Indian financial services space. It is building India’s first socially distributed full stack financial services platform for families in small town India. The financial needs of small town India have been largely ignored by incumbent players and fintechs who primarily focus on millennials in urban India. WeRize is already operationally profitable and is on target to become EBITDA positive by early 2022. It has registered 10x revenue growth in the last year. The company currently caters to customers in 1000+ cities and towns and plans to reach 4000+ towns in the next 2 years through its social distribution “Social Shopify of Finance” tech platform that will have over 50,000 freelance financial consultants across India.
WeRize is a full stack provider, both- developing and distributing a wide portfolio of customised credit, group insurance and savings products for 100 Million families and 300Mn individuals who live in 4000+ small towns of India. This $200 Billion and growing annual market expects a very different product set as well as distribution model which traditional private banks, insurers, and mutual fund companies are unable to provide. The economics of these products as well as operating in small cities is not feasible for traditional companies due to their high-cost branch-based distribution model.
Small town India families primarily bank with government or regional cooperative banks that only provide a basic bank account and don’t provide other financial products such as unsecured loans, credit cards, insurances or investments. Providing access to a broader set of products in this demography requires for a more differentiated and deeper risk management capability. Small town India lives in joint families and tend to have a single P&L for the family. WeRize has used this insight to develop financial products with entire families (and not individuals) in mind.
Additionally, this market needs high touch sales and after sales service which can only be profitably provided using a social distribution model. The Indian fintech ecosystem on the other hand is geared towards building do-it-yourself (DIY) apps that helps customers choose the right financial products for themselves. However, this approach doesn’t work for small town India families as there is a huge trust deficit about non-government financial products. To solve for trust and to provide the necessary ‘high touch’, WeRize has developed the proprietary “Social Shopify of Finance” tech platform through which it has empowered thousands of financially literate and digitally savvy freelancers to sell financial products in their social circle. The tech platform enables social partners to source business through online and offline channels, recommend the right financial product to their customers as well as provide after sales support.
Social distribution has so far allowed WeRize to collect over 1 billion data points across 500k families in 1000 cities. WeRize has used insights from these data points to create customised credit, group insurance, and savings products that serve the unique needs of these families. The social distribution model has also resulted in significantly lower customer acquisition cost (no branches or employees in these small cities) and helped WeRize build a sustainable business serving small town India.
Vishal Chopra & Himanshu Gupta, Co-Founders, WeRize said: “We are creating a new category in the Indian financial services space; a socially distributed full stack financial services platform for 4000+ small towns of India. The full stack approach of owning both the product and the distribution gives us unique insights about our customer segment that becomes an unbeatable competitive advantage. With the support of our investors, we have the opportunity to reimagine financial services for a large and profitable customer base that has been inadequately served by the existing ecosystem. And we will do this while generating livelihood for thousands of partners through our pioneering distribution model”.
Anurag Ramdasan, Partner at 3one4 Capital said: “Financial services for 4000+ small towns in India is a space that has been largely untouched due to the complex nature of the space. Vishal and Himanshu have been working on this space for 2 years to build a lean, efficient approach to solving the problem for 300Mn Indians. We strongly believe that their approach of designing financial products focused on families along with distributing through social model is the only way to win this huge market. So we are very excited to support them as they scale WeRize out and build more innovative products for small town India.”
Rajesh Raju, Managing Partner at Kalaari Capital said: “Vishal and Himanshu bring to the table all the necessary know-how and experience to build India’s first socially distributed full stack financial services brand for families in small town India . Small town India needs a very different set of products than is currently made available by incumbent players and a distribution model that solves the unique challenges that exist in these markets. The full stack play by WeRize hits all the right notes and we look forward to supporting the team in the exciting next phase of growth”.