MoneyTap

MoneyTap Foundation Story

MoneyTap, an innovative consumer lending startup from India, was founded with a clear vision to democratize credit access in a country where a significant portion of the population remains unbanked. Here’s a look at the company’s early days and the backgrounds of its founding team.

Vision and Early Days

MoneyTap was launched in September 2016 with the mission to solve the problem of insufficient consumer credit in India. The founders recognized that less than 1% of Indian consumers had access to unsecured credit from banks or financial institutions, forcing many to rely on informal and often costly methods to obtain credit[1][2].

The idea for MoneyTap was born out of the founders' experiences and interactions with consumers and bankers. Bala Parthasarathy, one of the co-founders, shared his insights from talking to bankers and over 1,000 consumers in Mumbai. He noted that cumbersome processes, rigid products, and a lack of transparency in traditional banking systems were major deterrents for consumers seeking credit[1].

MoneyTap aimed to offer a flexible and transparent credit line, allowing consumers to borrow money with ease and repay it over a flexible period. This innovative approach was designed to provide financial peace of mind and frictionless access to credit.

Founding Team Background

The founding team of MoneyTap consists of Bala Parthasarathy, Kunal Verma, and Anuj Kacker. Bala Parthasarathy, a serial entrepreneur, had previously co-founded several successful ventures, including Snapfish, which was acquired by Hewlett-Packard in 2005. He was also a co-founder of Prime Venture Partners, a seed-stage venture fund.

Kunal Verma and Anuj Kacker, before starting MoneyTap, co-founded TapStart, a job discovery platform that grew to 300,000 users before they sold the business. Their experience in building and scaling startups was crucial in shaping MoneyTap’s strategy and growth.

The founders brought a wealth of experience and a deep understanding of the financial and technological landscape to MoneyTap, enabling them to create a groundbreaking product that addressed a significant market need.

MoneyTap Business Evolution

Since its inception, MoneyTap has undergone significant growth and evolution, transforming from an initial concept into a robust financial service provider. Here’s a look at its journey and key milestones.

From Initial Concept to Current State

MoneyTap began as an app-based credit line, launched in partnership with RBL Bank. The app allowed consumers to borrow between Rs 3,000 and Rs 5 lakh, with repayment options ranging from two to 36 months. Consumers only paid interest on the amount borrowed, with rates as low as 1.25% per month.

The initial concept focused on providing salaried professionals with easy access to credit. Users had to pay a one-time setup fee of Rs 499, along with taxes, which was payable to the banking partner directly for blocking the credit limit.

Today, MoneyTap continues to expand its services, integrating eKYC and using machine learning algorithms to make smarter decisions. The app is available on the Android Play Store and has been downloaded by thousands of customers.

Key Growth Milestones

Since its launch, MoneyTap has achieved several key milestones. Here are some notable ones:

• Launch and Partnership: MoneyTap was launched in September 2016 in partnership with RBL Bank, marking India’s first app-based credit line[1].
• User Growth: The app has been downloaded by 10,000 customers and is available in major cities like Delhi, Mumbai, Bengaluru, Chennai, and Hyderabad.
• Business Metrics: The firm aims to serve credit to 1 million unique Indian customers in the next three years.
• Funding and Support: MoneyTap is backed by Prime Venture Partners and other venture capitalists and angel investors, reflecting the confidence in its innovative model.

These milestones reflect the company’s rapid growth and its commitment to expanding financial inclusion in India.

Product Portfolio Expansion

MoneyTap’s product portfolio has expanded significantly since its inception. Here are some key aspects of its current offerings:

• Credit Limit Flexibility: Consumers can borrow anywhere between Rs 3,000 and Rs 5 lakh, with the flexibility to choose repayment periods from two to 36 months.
• Interest Rates: Interest rates are as low as 1.25% per month, and consumers only pay interest on the amount borrowed.
• eKYC Integration: The app integrates eKYC to streamline the onboarding process and enhance user experience.
• Machine Learning Algorithms: MoneyTap uses machine learning algorithms to make smarter decisions and improve its services continuously.

This expansion has helped MoneyTap cater to a broader range of consumer needs and preferences.

MoneyTap Technology Infrastructure

MoneyTap’s technology infrastructure is a critical component of its success, ensuring a seamless and secure user experience. Here’s an overview of its core platform architecture, security framework, and innovative contributions to the industry.

Core Platform Architecture

MoneyTap’s platform is built to work within the banking systems and regulations, ensuring security, trust, and regulatory compliance. Here are some key aspects of its architecture:

• App-Based Interface: The platform is accessed through a user-friendly app available on the Android Play Store.
• Integration with Banking Systems: MoneyTap works in partnership with RBL Bank to ensure seamless integration with existing banking infrastructure[1].
• eKYC and Onboarding: The app integrates eKYC to simplify the onboarding process for new users[5]).
• Machine Learning Algorithms: The platform uses machine learning to enhance decision-making and improve user experience[5]).

This architecture ensures that the platform is both robust and user-friendly.

Security and Compliance Framework

Security and compliance are paramount for MoneyTap, given the sensitive nature of financial transactions. Here’s how the company addresses these aspects:

• Regulatory Compliance: MoneyTap adheres to all relevant RBI regulations and banking standards to ensure compliance and trust[2]).
• Data Security: The platform implements robust security measures, including encryption and secure data storage, to protect user information[3]).
• Continuous Monitoring: The company continuously monitors and updates its security protocols to align with changing regulatory requirements[3]).

This framework ensures that users’ data and transactions are secure and compliant with regulatory standards.

Innovation in its Industry

MoneyTap has introduced several innovations in the consumer lending space, setting it apart from traditional lending models. Here are some key innovations:

• App-Based Credit Line: MoneyTap was the first to introduce an app-based credit line in India, providing instant access to credit without the need for physical bank visits[1][5]).
• Flexible Repayment Options: The platform offers flexible repayment options, allowing consumers to repay the borrowed amount over a period ranging from two to 36 months[5]).
• Interest on Borrowed Amount Only: Consumers only pay interest on the amount borrowed, making the credit line a cost-effective option[5]).
• Machine Learning for Smarter Decisions: The use of machine learning algorithms helps MoneyTap make smarter decisions and improve its services continuously[5]).

These innovations have significantly enhanced the user experience and made credit more accessible and affordable for consumers.

Company Market Impact

MoneyTap, a Fintech startup from India, has made a significant impact on the financial market since its launch in 2016. Here’s how it has affected the market and its users.

User Base Growth

MoneyTap has seen rapid growth in its user base. Launched in October 2016, the app was initially targeted at salaried professionals in partnership with RBL Bank. By May 2017, the service was extended to self-employed professionals such as doctors, lawyers, and small proprietors[6].The app's user-friendly interface and flexible credit options contributed to its popularity. By November 2017, MoneyTap had already surpassed 1 million downloads, with over ₹20 crore disbursed in Bangalore alone[6].This growth indicates a strong demand for app-based personal credit lines, especially among professionals who need quick and flexible financial solutions.

Market Share Expansion

MoneyTap's innovative approach to personal credit has helped it expand its market share in the Indian financial sector. The company offers unsecured, short-term credit directly through the app, which is a unique selling point compared to traditional personal loans and credit cards[6].The service is currently available in over 30 cities in India, making it one of the most widespread digital lending platforms in the country. This widespread availability has helped MoneyTap capture a significant portion of the market, especially among younger professionals and entrepreneurs[6].

Financial Inclusion Initiatives

MoneyTap has been instrumental in promoting financial inclusion in India. By providing credit lines to both salaried and self-employed individuals, the company has helped many people access credit who might have been excluded by traditional banking systems[6].The ZeroPaperTM technology used by MoneyTap enables 100% paperless processing of customer applications, making it easier and faster for people to get credit. This has been particularly beneficial for those in rural or underserved areas who lack access to traditional banking services[6].

Company Financial Journey

MoneyTap's financial journey has been marked by significant milestones and strategic decisions.

Revenue Growth Story

MoneyTap generates revenue primarily through interest income, fees, and partnership commissions. The interest charged on the borrowed amount is the main source of income. Users pay interest only on the amount they withdraw from their credit line, and the interest rates are generally lower than those of traditional credit cards or personal loans[7].The interest rates vary based on the user’s credit profile, ranging from 1.08% to 2.3% per month. This model ensures a steady stream of income for the platform as users can borrow and repay multiple times[7].

Path to Profitability

MoneyTap's path to profitability is closely tied to its user satisfaction and usage. The company's revenue model aligns its profitability directly with user satisfaction and timely repayments. This encourages responsible borrowing habits and ensures a steady revenue stream from interest payments[8].Additionally, MoneyTap earns processing fees or service charges for advance disbursements and repayments. These fees contribute to over 20% of the total revenues for digital lending platforms globally, according to a World Bank report[8].

Investment Rounds and Valuations

MoneyTap has secured significant investments to fuel its growth. In June 2017, the company raised USD 9 million in a Series A round from Sequoia Capital, India, along with existing investors NEA and Prime Venture Partners. The total capital raised was USD 12.3 million[6].These investments have helped MoneyTap expand its services, improve its technology, and strengthen its market presence. The company was also selected in the 20 Global Startups for The India Fintech Awards Demo Day by India Fintech Forum in October 2017, further validating its potential[6].

Company Strategic Partnerships

MoneyTap's success is also attributed to its strategic partnerships with various entities.

Banking Collaborations

MoneyTap has formed significant partnerships with banks and Non-Banking Financial Companies (NBFCs) to offer its services. The initial launch was in partnership with RBL Bank, and since then, the company has collaborated with several other banking institutions[6].In Japan, MoneyTap has partnered with over 200 Shinkin banks for international remittances, highlighting its expanding role in cross-border payments. This collaboration with banks like Shinonome Shinkin Bank and Nagoya Bank has been crucial for MoneyTap's international growth[9].

Merchant Partnerships

While specific details on merchant partnerships are limited, MoneyTap's model of providing credit lines suggests that it could potentially partner with merchants to offer financing options to customers. This would enhance the shopping experience and increase sales for merchants.For example, if a customer needs to purchase a high-value item but lacks immediate funds, MoneyTap's credit line could facilitate the transaction, benefiting both the customer and the merchant.

Technology Alliances

MoneyTap leverages advanced technology to streamline its operations. The ZeroPaperTM technology allows for 100% paperless processing of customer applications, making the process efficient and user-friendly[6].Additionally, the company's use of AI and other digital technologies ensures that credit evaluations are quick and accurate, enabling fast disbursal of funds to users. These technology alliances are crucial for maintaining the high standards of service and user experience that MoneyTap offers[6].In conclusion, MoneyTap's impact on the market, its financial journey, and its strategic partnerships have all contributed to its success as a leading Fintech startup in India.