Fintech startup Niro, which enables e-commerce platforms to give credit to their consumers, scooped up $11 million in funding in April this year with a plan to expand its partner footprint, product offerings, and risk analytics capabilities. Last week, Entrackr interviewed the company’s co-founder and CEO Aditya Kumar to explore the firm’s offering and future plans.
Niro essentially is a B2B2C platform that helps consumer internet companies become consumer finance enablers by offering loans. It offers loans between Rs 50,000 and Rs 7 lakh for a tenure of 6 to 72 months with interest rates ranging from 12% to 28%.
Kumar explains, “As a loan service provider, we work with a large number of financial institutions both banks and NBFCs and help them underwrite the risk on these loans. And in exchange, we share revenue with lenders on the loan products that originate from the end customer of the product.”
While considering things before underwriting, Kumar said, “We principally look at customer’s proxies for customers intent, and proxies for customers affluence. Customer’s credit history is key for us and anonymized data that we get from the consumer internet platforms, and we augment that with data from the credit bureau.”
“The rate of interest is obviously decided by the above factors,” he added.
Niro claims to have disbursed Rs 500 crore worth of loans in just 20 months of operation and its loan book size (AUM) stands at around Rs 400 crore. The company also said that it has served 35,000 customers to date and its NPA (non-performing asset) is under 1.2%.
According to Kumar, the entire process is split into three parts: one part is the offer generation and the discovery of the credit product that happens through the consumer internet platform; the second part is when onboarding happens; the third is when Niro facilitates repayment back from the consumer’s account.
Niro was in pre revenue stage during FY22 and registered only Rs 31.77 lakh in revenue with Rs 7.9 crore loss during the fiscal year. While the company is yet to file FY23 numbers, the company claims that it closed FY23 with Rs $6 million (Rs 50 crore) ARR (annualised revenue rate).
Niro has already raised $14.5 million in funding to date and there are no immediate plans to raise a new round. “However, in the lending business, we also have risk participation to the extent of 5% as permitted by the recent digital lending guidelines. Capital is our raw material now,” added Kumar.
