Moneytap - The instant loan app solves your credit needs with a TAP

Moneytap Highlights

Startup Name MoneyTap
Headquarter Bangalore
Founders Bala Parthasarathy, Kunal Verma and Anuj Kacker
Sector Fintech
Founded October 2015
Parent organization MWYN tech Private Limited

MoneyTap - Introduction

Do you think that life would have been easier if you had a personal line of credit at your disposal? Who doesn't want a  hassle free credit, where there are no formalities and paperwork? And what can be better if the money gets topped-up in your account as you keep paying back the borrowed amount. You are wrong if you think it's not possible. Because, MoneyTap, a Bangalore based startup is doing exactly this.

MoneyTap claims to be India’s first app-based personal line of credit for consumers. Started by three serial entrepreneurs Bala Parthasarathy, Kunal Verma, and Anuj Kacker, the company was incorporated in October 2015.  MoneyTap lets consumers secure a line of credit up to Rs 5 Lakh, with the entire KYC process happening through their mobile app.

The main aim of the company is to deliver quick and flexible loans to individuals in partnership with banks, smoothly and efficiently.

MoneyTap - Industry Details

With increase in the number of internet users, almost every solution has become available online. Like all other services, financial services have also become easier with apps and online services. In Indian economy many Fintech companies are cropping up.

According to a report published by NASSCOM, there are around 400 Fintech companies in India. The Approximate investment  made in these companies is $420 million, in 2015. As per the NASSCOM report, fintech software and services market is expected to grow 1.7 times by 2020, making it worth $8 billion.

Government of India is also taking initiative to develop Visakhapatnam (Vizag) as fintech valley.

MoneyTap - Founders

MoneyTap was founded by Bala Parthasarathy, Kunal Varma and Anuj Kacker, who are IIT and ISB alumni.

Bala is the co-founder of multiple startups in Silicon Valley including Snapfish (sold to Hewlett Packard). He has contributed immensely to the growth of Snapfish to 100M users and $300M in revenue. Bala also volunteered for UIDAI under Mr. Nandan Nilekani in 2007. He started AngelPrime, an angel investment firm in 2011 (now Prime Venture Partners). While working with Angel he helped create companies like ZipDial (sold to Twitter), EZETap, Happay, etc.

Kunal who worked with Texas Instruments & Anuj, who worked with Airtel & JWT co-founded Tapstart that grew to 300K users and turned profitable in 2 years. They exited this venture in 2015.

With a small office in Mumbai and a head office in Bengaluru, the present Moneytap workforce comprises 30 people. The number, the founders believe, is likely to double in the by the end of 2019.

MoneyTap - The Idea and Starting Up

MoneyTap was founded especially by keeping in mind the needs of the middle class. The salaried class faces monetary issues while meeting various needs. These needs can be anything like medical needs, school fee, house rent or need of money for buying any product. The trio observed that just a minimal amount of credit can help the middle class to take care of these needs easily. But due to the extensive paperwork and formalities people hesitate to go to the bank for taking loans unless it is a big amount. Also credit cards and personal loans are not very popular in India

Besides, the middle class also finds it humiliating to borrow money from family and friends. Considering these issues faced by the middle class, MoneyTap was started up to meet their small credit needs

The name MoneyTap was decided because the app allows users to get money simply by tapping the finger.

MoneyTap Logo

MoneyTap - Services

The MoneyTap app, launched in partnership with the RBL Bank and several NBFCs, issues collateral-free credit up to a limit of Rs 5 Lakh. Further, the founders told that consumers can borrow anywhere between Rs 3,000 and Rs 5 Lakh from the app and choose from among several repayment options with regards to time, ranging from 2 to 36 months. Further, consumers pay interest only on the amount borrowed, with rates falling as low as 1.08 percent per month (13% per annum).

Being aimed at salaried employees and self-employed professionals, the consumers have to pay a one-time setup fee of Rs 499, along with taxes, which is payable to the banking partner directly for blocking the credit-limit.

We are trying to get the middle-income group to use our application. For us, the sweet spot is someone who earns in the salary bracket of Rs 40,000 - 50,000 monthly. However, we also don’t mind it being lower.

The founders also claim that the money gets replenished as the customers start paying their EMIs. For example, an amount of Rs 30,000 borrowed (out of the credit limit of Rs 5 Lakh) will get replenished as the person pays their installments over time, becoming available for further borrowing. Further, onboarding of customers happens through a chatbot interface, where the system instantly connects to the banking system and the credit bureau to find out the credit history of the customer, approving the money accordingly.

MoneyTap - Business and Revenue Model

MoneyTap has strong business fundamentals and clearly, money lending requires attention to detail. The way it makes money is through a revenue share with banking partners. Every time a customer gets approved for MoneyTap for having access to a credit line for a lifetime there is a small fee of Rs 500 is charged. Once the customer spends some money over a period of 1 year, the money is recovered. In addition to that the usual interest that the customer pays and some normal processing fees that is charged every time a person borrows also increases profitability for the application.

Therefore, MoneyTap is designed to be a product company which is running on the backbone of data science, technology, and product thinking. They are also finding solutions in a low-cost tech-friendly way which also enables us to profitability.

MoneyTap - Customer Acquisition

MoneyTap was successful in building a large customer base within a short period of time. Within just eight months of its inception, the company acquired 300K registered users from 14 cities in India.

MoneyTap acquires some of its customers organically. The company also markets its products through Google, social media and content marketing.

MoneyTap - Funding

Money tap raised $12.3 million seed funding from Sequoia India, New Enterprise Associates and Prime Venture partners in June 2017.

Date Stage Amount Investor
June 2017 Seed $12.3 million Sequoia India, New Enterprise Associates,Prime Venture partners

The funding, as stated by Bala, has also helped strengthen the leadership position of the consumer lending firm by improving credit accessibility for other segments of customers.

MoneyTap - Challenges

The most challenging thing in the consumer lending business is acquiring capital at low costs.  

Some of the major challenges faced by MoneyTap are-

  • Identifying trustworthy borrowers to whom credit can be disbursed without fear of defaulter
  • Maintaining strong relations with Banks and NBFCs

MoneyTap - Competitors

Finomena is MoneyTap's #1 rival. Finomena was founded in 2015 in New Delhi. Like MoneyTap, Finomena also operates in the Consumer Finance space.

The two other major rivals are PaySense and ZestMoney. Both these companies founded in 2015, works in Consumer Finance Sector. While PaySense is located in Mumbai, ZestMoney is located in Bangalore.

Lizzie Chapman, Co-founder and CEO, ZestMoney; Rajiv Raj, Co-founder and Director, CreditVidya and Bala Parthasarathy, Co-founder and CEO, MoneyTap

CreditVidya and New Delhi based Revfin also operate in the similar segment.

MoneyTap - Achievements

MoneyTap has more than 5 Million downloads. However, this number isn't indicative of customers who hold a credit line, since the rejection rate from the pool of applicants can be as high as 60-70 percent. This high rejection rate is because of the rigorous checks done by the app algorithms.

Almost 90 percent of MoneyTap's customers who have been issued credit lines are active and have drawn credit multiple times through the app. The average lending size of the company is Rs 30,000–35,000 and the average age of the customer is 28–30 years.

The company has a presence across 4+ cities, with a majority of their audiences coming from the top metros including Delhi-NCR, Bengaluru, Mumbai, and Chennai. MoneyTap also claims to have its non-performing assets well within the one percent mark.  

MoneyTap - Awards & Recognitions

MoneyTap was awarded the ‘Best Innovative Lending Product/Service’ in the Payment & Fintech category at the 8th India Digital Awards. The award show was organized by the Internet and Mobile Association of India (IAMAI). MoneyTap was also awarded as the leading FinTech Company, in the lending category, at PICUP Fintech 2017.

MoneyTap - Acquisitions and Mergers

We might acquire companies that share our values. But, we are not actively looking for acquisitions.

According to Bala, there are a billion consumers in the country, and MoneyTap serves only 1% of them. He considers that even doubling that to 2%, is a huge win.

MoneyTap - Partnerships and Tie-Ups

MoneyTap launched the product with its first banking partner - the RBL Bank. With the help of RBL's Technology MoneyTap was able to serve the customers with quick decision and quick access to money round the clock. Besides, RBL Bank also provides a MoneyTap-RBL Credit Card with the credit line.

MoneyTap - Future Plans

Moneytap's future plans include-

  • Issuing credit lines worth Rs. 2,000 crore, across 100+ cities in India, by the end of this year
  • Expanding services to 50 cities by the end of this year
  • Building partnership with more banks
  • MoneyTap aims to reach to the group having an income as low as 15000-10000

Website - Visit MoneyTap

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  • Bangalore, India