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KrazyBee is raising Rs 100 Cr+ debt from Sachin Bansal's BACQ and others essentially an online instalment store for students, Founder Madhusudan explains Krazybee has an NBFC license under the brand KrazyBee Services, co-lending along with six other partners. IIFL is the largest among the six partners. The new funds will allow the company to increase lending. The company is currently operational in five cities including Bengaluru, Hyderabad, Pune, Mysuru and Vellore and plans to expand its current set of lending products to six more cities this year. It has already managed to disburse 1 lakh loans since May last year when it had formally launched operations. He adds capturing the market early (through students) gives the company the basic advantage over key online lending platforms like ZestMoney, Simple, and credit lines like Money Tap. Further, Madhusudan explains that earlier, all loan tenures with customers (students) mostly lasted the duration of college. Now, the company is looking to extend the tenure beyond college, based on merit-based algorithms, to continue usage of service as students become young professionals. The firm also plans to foray into cash lending, entering into the payday-loan segment, with startups like Early Salary already operating in this space. KrazyBee may look to partner with corporate entities to operate this service. The Indian demography has a large population of urban young adults, that spends a lot online and offline. For such an enormous ecosystem, the need for urgent personal finance for purchase requirements is highly underserved. An appropriate focus towards tech-based credit evaluation and compliant sourcing of funds can help capture and penetrate this market big time. The average size of loans by KrazyBee is around Rs 15,000 with the maximum tenure being 12 months. The founder claims that currently there are no product, the firm offers which runs beyond 12 months of tenure. Questions: 1. 2. What are the challenges faced by online lenders like Krazybee, which are focused on a particular customer segment? Explain the role of UPI in providing a flexible and secure payment platform for online lenders? Do you think Krazybee should tie-up with any of the established traditional Players ? Give reasons for your answer? 3. KrazyBee is raising Rs 100 Cr+ debt from Sachin Bansal's BACQ and others essentially an online instalment store for students, Founder Madhusudan explains Krazybee has an NBFC license under the brand KrazyBee Services, co-lending along with six other partners. IIFL is the largest among the six partners. The new funds will allow the company to increase lending. The company is currently operational in five cities including Bengaluru, Hyderabad, Pune, Mysuru and Vellore and plans to expand its current set of lending products to six more cities this year. It has already managed to disburse 1 lakh loans since May last year when it had formally launched operations. He adds capturing the market early (through students) gives the company the basic advantage over key online lending platforms like ZestMoney, Simple, and credit lines like Money Tap. Further, Madhusudan explains that earlier, all loan tenures with customers (students) mostly lasted the duration of college. Now, the company is looking to extend the tenure beyond college, based on merit-based algorithms, to continue usage of service as students become young professionals. The firm also plans to foray into cash lending, entering into the payday-loan segment, with startups like Early Salary already operating in this space. KrazyBee may look to partner with corporate entities to operate this service. The Indian demography has a large population of urban young adults, that spends a lot online and offline. For such an enormous ecosystem, the need for urgent personal finance for purchase requirements is highly underserved. An appropriate focus towards tech-based credit evaluation and compliant sourcing of funds can help capture and penetrate this market big time. The average size of loans by KrazyBee is around Rs 15,000 with the maximum tenure being 12 months. The founder claims that currently there are no product, the firm offers which runs beyond 12 months of tenure. Questions: 1. 2. What are the challenges faced by online lenders like Krazybee, which are focused on a particular customer segment? Explain the role of UPI in providing a flexible and secure payment platform for online lenders? Do you think Krazybee should tie-up with any of the established traditional Players ? Give reasons for your answer? 3
