Running a business at 32, entrepreneur Anurag Jain faced all the highs and lows of running a company—including cash flow problems tied to unpaid invoices from corporate and a lack of credit lines from banks. Looking for a permanent solution, Jain teamed up with veteran banker Manish Kumar and the duo conceptualized KredX—an online bill discounting platform.
“KredX solves the working capital financing needs of SMEs by unlocking the cash tied up with blue-chip company invoices and it also provides an investment avenue for HNIs to deploy their surplus funds for a short tenure with great returns,” Jain explained.
Though brilliant in its simplicity, kredX faced a few challenges of its own before taking off into a full blown solution for both SMEs and investors.
“We faced a lot of challenges including acquiring our initial customers, skepticism around the product, technology barriers due to limited tech savvy SME population,” he said regarding the company’s early days. “We tested our hypotheses with our early adopters and ensured customer satisfaction from day one. We have a unique ‘go-to-market’ strategy for both SMEs and investors on our platform and our referral program has worked out beautifully in the United States and abroad.”
Although currently only SMEs in India can register as borrowers on kredX, investors including non-resident Indians (NRI) and person of Indian origins (PIO) can invest from anywhere across the globe as long as they have an NRO account in India. The right marketing and communication strategy went a long way in helping kredX find potential investors in the United States.
“We were able to effectively communicate the value proposition to our American investors as our product is appealing and our approach towards solving this problem is unique,” Jain said. “The U.S. has been a breeding ground for the best startups in the world so getting our first few customers was not a problem as customers are ready to try out innovative products. To them, the risk-adjusted returns on our platform looked attractive and they could immediately see how we are disrupting the financial services space.”
Maintaining quality on such a trans-continental scale is no easy task but it’s one that kredX and its founders do not shy away from. In fact, they are proud of their work ethic and quality control.
“As a fine tech company, we take our compliance very seriously and all our operations follow the recommendations outlined in the opinion given by one of the big four auditing companies in the world,” he said. “We have our internal timelines to process a request from our customer and we follow it rigorously to maintain the quality standards.”
“When the transaction is consummated on our platform, the borrower (SME) transfers the right to receive money on a set of invoices to the investor,” Jain continued. “Also, bill discounting is with recourse i.e. in case the blue chip company fails to pay the amount back in full via the escrow account, the investor has the right to go back to the borrower and ask for his money. If the investor faces any delay, KredX helps them recover the money from the borrower and also get pro-rated interest and penalty for the delayed time period.”
With such a tight hold on quality and credibility, it’s no wonder that the future holds limitless possibilities for kredX’s growth. Jain is hopeful for the future.
“We operate as a marketplace and our business model can be implemented across countries. Right now, our focus is completely on India but we do have global aspirations…our core business focuses on financing SMEs through credible sources, at the same time making it simple for financiers to buy verified invoices and earn better returns. We will continue to focus on strengthening our proprietary risk management framework that will help us determine the riskiness and credit-worthiness of the borrower,” he said.
His vision is crystal clear: Jain and his partners have a plan to solidify their position in India in a way that benefits all.
“We want to own the bill discounting market in India and channelize the surplus funds lying in the vaults of investors to the underfinanced creditworthy SMEs for the benefit of both SMEs and investors,” he said.
For young entrepreneurs looking to start out on their own, Jain’s advice is to always stay committed and persevere.
“Focused companies solving real problems for the long term can really be started and are likely to grow at any point in time,” the kredX COO said. “Stay committed to the cause with perseverance without being distracted by highs and lows on a day-to-day basis. Also, keep a strict check on your expenses and hire a passionate team…don’t be embarrassed by your failures, learn from them and start again!”