#026 Why we invested in Credilio

Credilio is building India’s largest ‘phygital’ distribution platform of financial products to provide credit access to millions of Indians across the country using AI-driven personalization and hyper-contextualization.

Credilio has built deep-integrated workflows with some of the largest banks and nbfcs in India to complete the entire product application digitally - right from lead generation to final approval decision in hours !

Credilio works with two types of distributors - (1) Independent Financial Advisors (IFA) for assisted applications and (2) Consumer-focused Digital Platforms for self-serve application. To IFAs, Credilio provides a mobile app with an extremely ease-to-use interface to manage lead gen, accept application, access financial products from all banking partners and complete the application journey. To Consumer platforms, Credilio provides APIs via which the platforms can access the financial product and allow their customers to complete the product application journey from within the partner platform

With the above background of the Company, I’ll jump right into ..

Our Investment Thesis for Credilio

Credilio is a great example of a scalable solution solving a pressing problem, with a large market opportunity, executed by founders with deep domain experience and proven success and coupled with a sound, profitable business model !

1. Highly Scalable Solution - The fully self-serve solution for IFAs and an API based solution for Corporates makes the platform highly scalable from technology standpoint. The business and the product is built in a way that it can be replicated across geographies and product categories - opening an even larger market for Credilio to tap into !

2. Large Market Opportunity - India’s retail sector is credit starved. As per industry reports, India’s retail credit penetration is ~15% of the country’s GDP, while the similar stats for developed nations like USA & UK is ~75%+. So, a huge potential for retail credit growth. To top this, more than 50% of credit products are sold via assisted journeys - i.e., financial advisors and agents.

3. Experienced Founding Team - Anand, Aditya & Sandeep has previously cofounded a fintech payments company which they successfully exited in 2019. We’ve known the team since, and found them to have strong domain knowledge, complimenting skills and a proven track-record of execution at scale. We believe this team that stuck together through thick & thin has the resilience to build a resilient business !

4. Positive Unit Economics - Every transaction that flows through Credilio’s platform is margin accretive. The funding is required to blitz-scale the operations pan-India and not fund their working capital. With sufficient funding, their proven model in one region can now be replicated across all other regions in India and with other partners

5. Potential for Category Leadership - The largest digital distribution platform in India - PaisaBazaar has disbursed only ~Rs 6,600 Cr of retail credit in FY22 - that is just ~2% of the total retail credit availed in the period. With its unique distribution strategy; fully integrated, end-to-end application journeys and AI driven personalization; Credilio has a strong potential to become the leader in this category

6. Delightful Customer Experience - At the heart of product is the AI-powered recommendation and personalization engine. The platform can intelligently predict & recommend the best suited product for a customer based on his/her profile with high probability of successful underwriting. It can intelligently recommend best-fit products based on the context of the customer journey (Eg: offering an Indigo Rewards HDFC Credit Card to a customer who is booking an Indigo flight on a partner OTA platform)

Basis our thesis above, we decided to lead the pre-Series A investment round in Credilio and will continue to back the team and work with them to become a Centaur (a $100 mn ARR co.) over the next few years !

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~ Vatsal

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