Summary

The Offline Network Episode 27: Fintech Listings & Infrastructure (aired 2025-10-31). Guests: Priyanka Kanwar, Anubhav Jain from Falcon, Rupifi. Priyanka: "But the reason I continue to be so pumped about what we're building is because, guys, I think even today, there's trillions of dollars in terms of payment flows and credit flows that are actually going through legacy systems." Priyanka: "And typically, when I'm introducing the field to somebody new, the way I describe it is that if you look at a bank, typically, there are two major types of products that a bank launches in the market, right?" Topics: venture capital and funding, AI and LLMs, consumer brands and D2C, B2B/SaaS. The Offline Network is India's live show on startups, tech, and venture — streaming M/W/F at 4 PM IST on YouTube.

Full Transcript

Dhruv Sharma: Hey there listeners, it's great to have you with us today. We're streaming live. It's Wednesday. Today is a fintech special Grow has listed today and the two founders we're going to be speaking to in a short while from now are also the incredible fintech founders. What's up? How's it? How's everything going?

Utsav Somani: Awesome. Excited for the chat today.

Dhruv Sharma: Yeah. Grow's listing day, huh?

Utsav Somani: Yeah. And debuted at a 29% premium. What a blockbuster listing. A big, big set of winners here. This is the first YC company to go public from India. They own approximately 13% of this company and Sequoia, which was known as Sequoia previously and now peak 15, the 2018 fund, I think, which invested twice into this company, sitting on at least 52 X gains from their overall position in Grow, but also looking to return their fund, the 2018 fund twice over if they decide to sell it once the lockup expires. But the funny thing about this company is, and Anu Hariharan did a tweet about this also, some of the stats are fascinating. You can talk more about the DMACC numbers, but I just want to give the revenue growth that this company has seen. 700K at their Series B, and that was the ARR that they were at. 2 million ARR in 2020 when they raised their Series C, just around the pandemic. And now, after that, they've scaled to 450 million in revenue with almost 45% net income margin. So insane growth that they've seen in the five year journey that they've had since COVID. Founders own close to 26%, and I mean, it's a company which is listed at 8.5 billion today. So big, big milestone for the ecosystem. Congrats to all the Ford founders there as well.

Dhruv Sharma: Yeah, Lalit, Harsh, Neeraj and Ishan. They're saying this is the most profitable venture backed company in India to list, at least up to this point. Do you remember for the longest time, I think through the 2010s, the only great examples or icons we had go by was say, Nokia, MakeMyTrip, and we're now getting new ones pretty much every week. Yeah, I know.

Utsav Somani: I mean, every day is almost an IPO special, I think we'll do Pine Labs very soon, Urban Company was there, so many of them, Nisho, Zepto also. So I think great liquidity and YC must be reinforcing their belief in the Indian ecosystem. These guys are flipsters.

Dhruv Sharma: So the X Flipkart and CardMafia, one company has created, I don't know, some 10 unicorns, 10 or more, we're now going to create another 10 each. So that's been another cycle.

Utsav Somani: Pran, Phonebase, Spinny, Cult, Slice, Rentomojo, Navi, Exotel, Okcredit, just a list of companies coming out of it. And that's the beauty about these tech companies, right? A lot of people think that their point of time, I mean, the biggest innovation that they've done is just a horizontal marketplace, but look at what they've spun out, right? I mean, you're getting these awesome companies that are driving innovation, that are driving returns, and the new economy is spinning, like where people believe in the value of ESOPs as well. I think the Bangalore rent prices will go up today.

Dhruv Sharma: As I do with each of these liquidity events, you know, if you read the original Sequoia India memo on this investment, they talk about how Lalit and his co-founders were, you know, in a sense of industry outsiders, they didn't come from this industry, but they were the best in class founders when it came to, you know, tech and product. And they had a lot of things going in their favor also, you know, right place, right time. Two things come to mind, you know, EKYC came about, so just verifying your customers became a lot cheaper than before. And UPI, of course, grew in adoption, so transaction costs came significantly down, which is where that key inflection point in the company, where it went from becoming just a distributor for direct mutual funds to actually getting the stock broking license and that huge margin expansion happened. But yeah, very, and it looks like these founders are loved by all because everyone has great things to say on the timeline today about them.

Utsav Somani: 100% and Lalit, if you're listening to this ever, congratulations and yeah, thank you so much for investing in offline as well. All the best to you and the team. What's happening in the world of AI?

Dhruv Sharma: There is one announcement and this is less to do with AI, but it has to do with Masa and SoftBank, which is they've unwound, they've sold their stake in NVIDIA. I think that does all of it for the number I'm looking at is 5.83 billion dollars. I can maybe quickly read a statement from the CFO where he says this year, like SoftBank statement is generally very simple. So this year, our investment in OpenAI is large, more than 30 billion dollars needs to be made. So for that, we need to divest our existing portfolios. We do not have a specific reason to sell in October and it has nothing to do with NVIDIA itself.

Utsav Somani: And the funny thing is somebody tweeted about this, that SoftBank is selling their stake in NVIDIA to invest in companies that will eventually end up spending on NVIDIA.

Dhruv Sharma: So cash should keep flowing like water. This is, do you remember that scene where, like it happened a couple of months ago where Masa and Jensen Huang are on the stage and Jensen reminds everyone there was a point in time when Masa was the single largest shareholder in the company and he sold, like this was 2019 from, if I'm not mistaken, the 100 billion dollar Vision Fund 1. Levered. Yeah, levered fund. But they took home like 3 billion dollars in profits or a small amount.

Utsav Somani: But if they held on to that stake, the entire NVIDIA stake would be worth over 230 billion. So that's a crazy problem for SoftBank. Yeah, the right thesis with wrong sort of fund structure. Yeah. Hold power, hummingbird, again, thing that we discussed last time. A quick one on note takers. Every call has a note taker, but funny enough, when Fireflies, which is one of the most popular note takers as well, when they existed in 2017, the founder actually posted that he was joining every call manually himself and actually taking notes and sending the summaries to their users. I don't know if it's borderline illegal, but that's, I mean, two sides to it always. Like, I mean, either you bury it somewhere in the terms and conditions and then just fall back to them if somebody discovers this. I mean, that's a crazy growth hack to get the flywheel going for your business. But also that's, I mean, I don't know, man, like this is some different territory.

Dhruv Sharma: You know, Toby, the Shopify founder has a really funny tweet on what it is, what it means to bring a note taker with you to a meeting. I'm not going to say what the tweet is, but maybe everyone can just go look it up. It's funny.

Utsav Somani: And Cluely, which was a viral hit, which raised from A16Z with all their viral marketing tactics, that's also a note taker now. So either you live long enough to go public or you die as a note taker. That was a funny joke that I read. Yeah. All right. So Warren Buffett's tapping out his final newsletter. I mean, not newsletter, but a letter that he posts after his Berkshire Hathaway meetings is also there. There's a line that I want to read out from it. There are only two, I think, such letters that I wanted to follow very closely, which was Jeff Bezos and Warren Buffett. So sad that we won't see many of these come out again. The line reads, greatness does not come through accumulating great amounts of money, great amounts of publicity or great power in government. When you help someone in any thousands of ways, you help the world. Kindness is costless, but also priceless. What a beautiful set of words that he's tapping out with. We'll miss him.

Dhruv Sharma: From here, the markets are on their own.

Dhruv Sharma: The Oracle is no longer around. Yeah.

Utsav Somani: I mean, yeah, Diet Coke stuff. We should. I mean, he was popping like, I think, five cans of Diet Coke every day and a McDonald's burger every day. Do you think that's really happening? I think so. I think so. Dude, even the TVPN guys actually are drinking like four cans of Diet Coke every episode. Like, and I mean, it's just insane.

Dhruv Sharma: Is that the secret sauce?

Utsav Somani: Maybe we need it. Yeah. All right. Let's welcome our first guest. Fintech special continues with Priyanka Kanwar. Priyanka, welcome to the show.

Priyanka Kanwar (Co-founder & CEO, Falcon): Hey, thank you so much. I want to ask you, what are you guys drinking?

Utsav Somani: I'm drinking just plain cold water, actually, and enjoying the delicacy.

Priyanka Kanwar (Co-founder & CEO, Falcon): There's no Diet Coke.

Utsav Somani: We're still a few days away from Friday when this will switch to tequila, basically.

Priyanka Kanwar (Co-founder & CEO, Falcon): Oh, nice. I was supposed to be invited on the Friday episode then.

Utsav Somani: You're in Suhail's spot. I'm guessing he takes good care of all of you, but coming on the show, we'll have a whole bunch of questions for you. But for our listeners who are tuning in and hearing about Falcom for the first time, can you take two minutes to explain what the business does?

Priyanka Kanwar (Co-founder & CEO, Falcon): Absolutely. I love talking about my business. I keep joking that we're in a very unsexy field, so it's not easy to explain the business. I also laugh about the fact that almost every year I have to keep sending an introductory video to my family to tell them about what Priyanka does and what my business is about. But jokes aside, we are actually building the operating system for modern banking. So I'm the founder and CEO of a company called Falcon. And the reason I continue to be so excited about what I'm doing, I've been literally doing this since I graduated from college, which is a long time ago now. But the reason I continue to be so pumped about what we're building is because, guys, I think even today, there's trillions of dollars in terms of payment flows and credit flows that are actually going through legacy systems. And so a lot of the banks that we are today working with or the banks that we look at, even globally, a lot of the banks that we're looking at globally as well, all of them are running on systems that were literally built and invented before the internet even came in. Like the first credit card was invented in the 1950s. Some of those systems are literally from then. So when you think about those kind of systems, you're talking about banks being able to only launch products in years. And today, the kind of systems we're building, we're helping banks launch products like credit cards, credit lines, digital loans, and even UPI in a matter of weeks. You're moving away from capex models where banks had to spend millions of dollars upfront. They had to spend tens of thousands of dollars for tiny, tiny changes. You're moving away from that kind of a model to SaaS-based, off-the-shelf systems, AI-first, cloud-native, which completely run on OPEX pricing models. So we're fundamentally changing the way that banks are building technology, launching products. Today, we're working with about 15 banks in India. We're processing more than $2 billion in transaction flows, working with banks of all sizes, all the way from the largest private sector banks to mid-size public sector banks, and even payment banks and small finance ones.

Utsav Somani: Nice. And banking as a service, that's a term that was used, I think, somewhere in 2016, 2017. Is that what you would describe the business as also?

Priyanka Kanwar (Co-founder & CEO, Falcon): So honestly, there's a lot of terms being thrown around, right? There's banking as a service, there's embedded banking. And honestly, every year, the consultants come up with a new term. But what I would fundamentally describe what we are doing as financial infrastructure. So these are mission-critical core systems that a bank uses. And typically, when I'm introducing the field to somebody new, the way I describe it is that if you look at a bank, typically, there are two major types of products that a bank launches in the market, right? So on the one hand, you have liabilities. And liabilities is where your current account, savings account, my account sort of sit, right? So those systems are managed by giants like Infosys, Oracle, right? Those are the core banking systems that a bank would use as technology. On the other hand, you have assets and payments. So credit cards, credit lines, debit cards, prepaid, UPI, all of those products sit in other systems, which are for assets and payments. Those are the systems that our company builds, right? So those are very mission-critical systems. Banking as a service is a layer on top of these systems, which allows banks in the form of APIs and SDKs to talk to various external parties. So if a FinTech company, for example, wants to work with a bank, they would need the bank's developer hub to integrate with them using APIs, right? So our systems basically enable banks to be BaaS-friendly from day one, right? For them to actually have these developer hubs available and ready to go from day one.

Dhruv Sharma: I think what might be very interesting and helpful to our listeners is for you to explain to us why is it so hard for banks to walk away from those legacy systems? The CBS, it's written in COBOL, runs on monolithic mainframes. And then, you know, in the cloud-native era, of course, we were in a certain phase. Now we're kind of even beyond that. So what role did microservices have, without getting overly technical, but in the simplistic terms, that'll just defer to my question, right? Why can't banks just abandon those age-old systems?

Priyanka Kanwar (Co-founder & CEO, Falcon): Yeah, no, absolutely Dhruv. I think that's an excellent question. That's basically, you know, it defines our existence as a company, as a team every single day. And, you know, if I were to put it in one word, it's simply inertia. And honestly, we also joke in our industry that this is more of an anthropological problem than it is a technical issue. Because, you know, when you're looking at sort of changing such mission-critical systems, which have stuck around for so many years, right? These are highly sticky sort of, you know, systems and contracts. And so, of course, you know, you can't move fast and break things in banking. Obviously, there's a whole lot of nuances to this. There's compliance, there's regulation, there's, you know, fraud management. There are so many things that you have to sort of like really think through. And so, because of the sensitive nature of the space, the decisions in the space take a lot longer, right? There are multiple committees at a bank that need to actually approve, evaluate systems, they need to approve decisions. And so, you know, obviously, it has been painful maybe in the early years of that transition from legacy to modern. But thankfully, Dhruv, what we're seeing now, and especially, honestly, you know, India is leading the way globally for this. What we're seeing now is that I think that the need has become so critical, right? This has almost like become a hygiene need. Now, this is not good to have anymore. It's not only for innovation, right? This is like actually a hygiene sort of like very basic need that banks have. And so, what banks have started to do is that in order to expedite that transformation, they have even started to prop up parallel systems. So, they may have, let's say, a legacy credit card system for whatever is already running. And then they also have parallel systems where new use cases and innovations can come in so that that transition becomes simpler. But, you know, honestly, it is just the nature of the business that banks do that they take a lot longer to do that transformation.

Utsav Somani: Dhruv Ramaswamy HTFC and Kotak, just to like, I mean, no question, but like HTFC and Kotak Bank, they have like old and new apps. Like, I think HTFC just revamped their whole thing. Now, suddenly, I have two apps on my phone. It says HTFC old, HTFC new.

Priyanka Kanwar (Co-founder & CEO, Falcon): Shruti Gupta So does Kotak, yes, you're right. Dhruv Ramaswamy Exactly.

Dhruv Sharma: The application layer is where they're taking help from, you know, players like you to just modernize the experience for the consumer. But again, the core banking system, the ledgers, etc., it's still, for the old banks, it's still the way it's always been.

Priyanka Kanwar (Co-founder & CEO, Falcon): Shruti Gupta Actually, Dhruv, you know what's happening right now? And I'm very excited about this. We're one of the first TSPs in India to have actually successfully completed a migration for a bank from a legacy credit card system entirely to a modern system. So even the rails, even the core, actually, which is a credit card management system, the switch, the ledger, you know, everything to do with what a credit card sort of needs, you know, all of that, the plumbing is all new. It's all modern. It's all modular. It's all microservices based. So, yes, there are some banks that are taking a little bit longer. And the larger the bank, you know, the more difficult the problem statement and the longer it takes for them. But a lot of midsize and challenger banks are leading the way. They're replacing those old systems entirely. And when that happens, when you have, you know, new plumbing, the kind of magic that can happen on the application and product layer is unprecedented. So I'm very excited about the next five to 10 years, both in India and globally.

Dhruv Sharma: And Priyanka, you guys are also, go ahead. No, no, please. I was just going to say, you guys are also a very young team at Falcon. What's the journey on sales been like? How have you gained legitimacy and trust with banks? And how do you go sell them?

Priyanka Kanwar (Co-founder & CEO, Falcon): Yeah, Dhruv, I think that's another great question. And I've honestly, I've been in the business for a decade. I might be actually the youngest in my management team. I've got some very, very brilliant, amazing folks who've actually been around for more than 20, 25 years. And honestly, over time, we've all built a lot of thick skin, a lot of patience. This is a patient game, right? And so you guys were talking about Warren. I mean, we come from Warren and Charlie's School of Thought when it comes to building businesses, because, you know, we really, my cofounders and I both, we believe in building businesses over, you know, a long period of time, because if you want to build something truly generational, something truly impactful, you know, you do need to play that long game. And we're also very fortunate to have investors, Dhruv, on our side who understand what patient capital really means, right? Because the kind of businesses that we are, you're absolutely right. The capex cycles are long. The sales cycles are long. And once you've closed a deal, right, even after closing the deal, the implementation takes time, because like I mentioned, you know, you can't move fast and break things. And so, yes, sales cycles are long, but all of us over time have sort of like built this into our DNA. So, you know, everyone at Falcon now knows how to sort of like work and collaborate with bankers very closely to make that magic that I was talking about happen.

Utsav Somani: What are the two most tech forward banks that you've worked with in the recent past?

Priyanka Kanwar (Co-founder & CEO, Falcon): That is a very interesting question, Utsav. I think one of my favorite banks to have worked with is a 110-year-old bank from South India. It's called Karur Vyasya Bank. And even though they are 110 years old, they are definitely among the most tech forward. They were the first to raise their hand and say, hey, we are not happy with legacy systems. We want to completely modernize our core. We want to do this completely afresh. And now we're actually helping them launch a whole bunch of new innovative products that have never happened in India before. They are doing a whole bunch of partnerships and collaborations that are coming up. So I think that has always been one of my favorite banks. The second bank that, you know, today we're working with and very excited about the kind of products that are coming up are on the credit line on UPI Space, where Jana Small Finance Bank is actually making big strides. So in the coming few days, you will also see quite a few announcements coming from them. They have a super innovative product that they are launching.

Utsav Somani: Nice. And these legacy systems, I'm guessing, are built with a combination of like internal tech teams and then like an external partner like Infosys and TCS. So I'm guessing you work with them. You've recently announced a partnership with Tech Mahindra as well. So talk to us about that a little bit.

Priyanka Kanwar (Co-founder & CEO, Falcon): Yeah, absolutely. So I think, you know, I'm really proud of the fact that, you know, India, like I mentioned, has leapfrogged so many different countries and, you know, in terms of payments and credit, right? And we are leading the world today. I think that goes without saying. But I think, you know, now that we build such a fantastic talent pool in India, we build rails like, you know, within the India stack. I think it's time that we as a country, we as a startup ecosystem, actually, you know, build up our ambitions further. We want to be bold enough to pick up all of this technology, to pick up the IP, pick up the talent and export it globally, right? And I think that there's a massive opportunity to do that. If you look at the global landscape, less than 20% of the 40,000 banks or credit unions that exist around the world are actually currently on the cloud, right? So you're talking about, like I mentioned, trillions of dollars of transaction flows that can move to modern systems. If you look at a company like Tech Mahindra, they actually have a presence at more than 50 countries. They've got implementation centers. They've got distribution centers all across the world. So what we want to do is we want to collaborate with them more closely in the Asia-Pacific region, in the Europe region, of course, in the US as well, and start taking this Indian technology to banks globally. So I'm excited that partners like TechM actually help us expedite that expansion journey.

Utsav Somani: And you mentioned going global. So what are the other markets that you're focusing on? Is UAE, which is the national extension for many Indian businesses, is that a focus area or a focus market for you?

Priyanka Kanwar (Co-founder & CEO, Falcon): Absolutely, Utsav. I think the Middle East market is very exciting. Both UAE, Saudi, Oman, these are all markets that are picking up a lot in terms of digital transformation for financial institutions. I have personally been very bullish on the Vietnam and Philippines markets, as well as some of the other countries in Southeast Asia. The reason for that is that these markets are actually where India was perhaps about seven, eight years ago. And so if you look at these markets closely, they've got a government push as well in terms of banks going on that digital transformation journey. They're all smartphone first. They want to expand penetration of credit. But I think infrastructure remains a fundamental issue in a lot of these countries. Plumbing remains an issue. So they're in desperate need, I think, of modern systems and modern technology. So I am very bullish on those markets.

Dhruv Sharma: Priyanka, can you give us a sense of the Indian market? How many full service banks do we have? How many small finance banks do we have? How many non-bank, how many NBFCs do we have, really?

Priyanka Kanwar (Co-founder & CEO, Falcon): Yeah, no, absolutely. I think, you know, obviously the landscape is quite large. And if you include the cooperative banks as well, you're looking at numbers which are sort of running into hundreds. But if you look at, you know, the core banks in terms of the scheduled commercial banks, you have private, you have PSUs, you have SFBs, you're looking at over 50 banks. I think there are about seven or eight SFBs. Sometimes even I have to brush up on my numbers.

Dhruv Sharma: I know, the numbers keep changing, yeah.

Priyanka Kanwar (Co-founder & CEO, Falcon): Yeah, they keep changing. So you have that. And then plus, of course, you have over 300, you know, solid NBFCs. Of course, there's thousands of NBFCs that have licenses. But you have over 300 NBFCs that are doing exceptionally well. You have about, you know, top 20, which are at scale. So I think the Indian ecosystem is definitely among the most thriving ones, you know, globally. As compared to the U.S., U.S. has deeper penetration. So they have more than 4000 banks. But I think the Indian ecosystem is also getting more and more exciting and more and more competitive.

Utsav Somani: All right, folks, let's double down on the Fintech special. Let's welcome Anubhav as well to give us a joint segment. Let's go split screen with Priyanka and Anubhav. Anubhav, welcome to the show. I hear that your throat is not doing that well today. Yeah, but I will try and do justice. Did some of the Delhi pollution reach you in Bangalore or something else? It's just a change of weather. Awesome, guys. So Grow got listed today. How's the Fintech mood and energy today? Are you celebrating with your peers?

Anubhav Jain (Co-founder & CEO, Rupifi): Yeah, of course. I think it's exciting to see one of the peers reach that milestone. So yeah, congratulations to them.

Utsav Somani: And Priyanka, have you done any work with Grow?

Priyanka Kanwar (Co-founder & CEO, Falcon): Not yet. I hope to at some point as they expand their credit rails. But what's up in general? I think all of us in the startup ecosystem are feeling very happy, very positive about the fact that India's public market is basically the second highest performing after the US. And so the fact that public listings are becoming such a norm. You know, four or five years ago when Zomato first came in, it was like the first sort of tech company to have listed, right? Now the fact that so many of us, literally every week we're hearing about a tech listing. So I think that's really opening up the doors for all of us. And it's creating that trajectory for us to be able to find those exits, both for our investors as well as to build credibility.

Utsav Somani: And I think employees are happy as well, right? Finally, they realize the value of ESOPs and their hard work also paying off. And you mentioned credit on UPI. So I'd love to hear both your thoughts on where that industry or that direction is headed.

Priyanka Kanwar (Co-founder & CEO, Falcon): Absolutely. Anubhav, please go ahead.

Anubhav Jain (Co-founder & CEO, Rupifi): Yeah, so I think UPI has become the defacto standard, not just for payments, but I think for ancillary services that are getting extended purely based on UPI reels, credit being the first one that is getting tried and tested across different lending institutions. The benefit that UPI brings is, first of all, the interoperability. The second is the ease of use. So, you know, if I'm extending credit on UPI, it's almost like for the user, simply having a bank account, a UPI handle, and then you have to go from the very next one. So we already have a product where we are trying to use credit on UPI to give some kind of a scan and pay facility to the customers. And these are largely SMEs who have been the early adopters of UPI with respect to receiving payments, right? So the whole wave of UPI has been successful because the smallest merchant has adopted QR codes and UPI payments, even for a 1 rupee, 2 rupee, 5 rupee, 10 rupee payment. And I think that is where the extension of credit is seeing its future.

Dhruv Sharma: We're really troubling Anubhav on the wrong day. I have a feeling, but Anubhav, you will power through.

Utsav Somani: What's your take on this? I'd love to hear your take as well. Yeah. Because you mentioned credit on UPI a few times.

Priyanka Kanwar (Co-founder & CEO, Falcon): Yeah, yeah. So yeah, absolutely. So I think, you know, we as a company, because like I mentioned, we're building the core infra that banks run products like credit on UPI on. We've actually been seeing the evolution of this product right from day one. We're actually one of the first ESPs in India also to have built a CLOU system that doubles up for credit card. So we can, you know, allow for both credit card and personal loan constructs on CLOU. Right now, where we are at the journey, right? It's very early days. It's reminding me of the time I was actually in the room when UPI was first launched by Nandan Ilekani back in 2016. And there was like basically 200 people in that room at the Taj Bangalore. And everyone was asking each other and wondering, hey, where is this going to go? And I think this is what it feels like with CLOU right now. It's early days. And so there are very few banks that have actually adopted it. In fact, I'm seeing small finance banks seeing a right to win in this segment because they have not really been the first movers with credit card, right? And when this product came in, it's like Anuva rightly said, there's 200 million odd QR codes in the country, which means that the acceptance infrastructure is insane. So anyone, whether it is in Delhi, Bombay, or a tier two city, or even like a village can actually pick up the phone, scan this QR code and use that credit line, right? So I think I'm very bullish on the fact that number one, it's going to really help with credit expansion and penetration. But incidentally and excitingly, what I've also noticed is that earlier, it was supposed to be a product for folks who were not eligible for a credit card, let's say, right? Because the limits are like under 50,000 or 60,000. But now what I'm seeing is that consumer behavior, even your behavior and my behavior has altered so significantly towards UPI, that even folks like us are now going to start looking at this as an alternative to the credit card. So if you want to spend 150 or 200 bucks, let's say on a small transaction, you may not want to use your credit card. You may go to a TPAP app, ask for a CLOU line, get like a 20,000 line and just use that. So I think honestly, early days, but I am very bullish. And you're also going to see a lot of innovation like purpose-driven credit coming up. So I think lots and lots of things to look forward to.

Dhruv Sharma: And how would business models adapt in response to this, Priyanka? I mean, with no interchange fee or I mean, for cardless options, how's the math going to work out?

Priyanka Kanwar (Co-founder & CEO, Falcon): Actually, incidentally, Dhruv, this is super interesting, but I think all of us are rejoicing in the fact that credit is actually bringing monetization back to UPI. So if you look at credit card and you look at CLOU, you will actually see interchange rates and MDRs coming back over there. Because this is incidentally a credit product, which means that banks have to underwrite risk. Whenever there is risk involved, then there has to be that coverage of the cost of capital for whoever is underwriting the risk. So I think honestly, we are all happy with the fact that there are interchange rates and that not only allows for coverage of risk, but you can also have those reward programs that people love so much with the credit card. So I think that's how it's going at the moment.

Utsav Somani: So you think MDR will make an entry into the UPI world?

Priyanka Kanwar (Co-founder & CEO, Falcon): No, no, it is back. So CC on UPI and Credit Line on UPI have MDR, both of those products.

Utsav Somani: Even on the, okay, wow. Like so RuPay credit card, you actually, I mean, the banks have to pay MDR?

Priyanka Kanwar (Co-founder & CEO, Falcon): Yes, yes. Like the issuing bank actually gets the MDR and the merchant has to pay it. So yeah, that's very much there because like I mentioned, it's a credit product. So the underlying risk has to be factored in.

Dhruv Sharma: And are banks thinking of this as a retention product or an acquisition product from a customer standpoint?

Priyanka Kanwar (Co-founder & CEO, Falcon): That's actually a very interesting question. I think the very first priority is acquisition. So it's about new user acquisition. And I think for some banks, of course, even for the ETB customers, ETB is existing to bank. I think it's a nice cross-sell strategy, which definitely, like you mentioned, does allow the bank to retain the customer and increase the average transaction and wallet share per customer. But I think for a lot of banks, this is an interesting acquisition strategy because folks who never could be eligible for a credit card can potentially be eligible for CLOU. So it's a nice way to bring those customers into the credit fold.

Utsav Somani: Anubhav, what are your views operating in the world of B2B credit?

Anubhav Jain (Co-founder & CEO, Rupifi): No, absolutely. I think the first thing is like pre-income actions of our banks specifically, they have a very large customer base. But they've never been able to convert a large percentage of that into credit. Now, personal loans, business loans are obviously larger than ticket size products. Credit cards have always been for a very small percentage of population. Credit on UPI gives them the flexibility to maybe run 2,000, 5,000, 10,000 kind of credit for their customers and test. That way they can build credit history. They can launch products, do the basic KYC, run completely digital process, see which of these customers are credit worthy and then go on and offer more complicated products. So in the SME side, I think that makes a lot more sense because that is where there is a lot of underprint penetration of credit. So we believe that and we are seeing that when we speak to banks, they're all looking to try new ways of testing waters. So they have a current account base, but they now want to use that base in the form of an overdraft or a credit on UPI to give some kind of starting credit to these SMBs. I think whether it's credit on UPI or whether it's any other form of credit to SMBs, it's going to see a lot of change in the future because the ticket size and the opex behind doing small business credit has been the biggest bottleneck. And now it's changing. So with technology, with the kind of plumbing that Priyanka talked about, with the kind of infra that players like Shalkhan are building, I think it's becoming easier for traditional lenders to go and say that, hey, I don't need your financial statements. I don't need your last two years of GST information. I don't need one year of bank statement. I can do an account aggregator. I can quickly check your ATM phone, pay QR statements. I can understand what kind of business you are doing. And because of that, I'm ready to give you credit in like 15 minutes.

Utsav Somani: Awesome. Dhruv, any final question before we let Priyanka go and switch to a solo with Anubhav?

Dhruv Sharma: What's next for... What's 2026 going to be for Falcon, Priyanka? What are you most excited about?

Priyanka Kanwar (Co-founder & CEO, Falcon): What am I most excited about? We're always looking towards 2040. But 2026, Dhruv, I think is going to be about moving faster, building faster, sort of helping our current existing clients grow their business. That's something we love doing. We love taking our clients from X to 10X in terms of even the base that they have. So it's going to be about that. And I think most importantly, it's going to be about us, like I mentioned earlier, going global. And finally, being able to take Indian tech to some of the countries I mentioned.

Dhruv Sharma: Maybe one final question. You guys were thinking of launching a pod. Has that happened?

Priyanka Kanwar (Co-founder & CEO, Falcon): Sorry, the podcast?

Priyanka Kanwar (Co-founder & CEO, Falcon): Yes, we did, actually. It's called Cash and Code, you remember? It's... The first episode is out. So my co-founder, Chinmay, has done a really nice one with the CIO of Yes Bank. And in fact, a lot of the questions that you guys have had in mind about AI and banking, you know, Mahesh sir answers those questions really well. So I'm going to send you the link afterwards.

Dhruv Sharma: You should, and we'll share it with others. Yes. Yes, absolutely.

Priyanka Kanwar (Co-founder & CEO, Falcon): But thank you so much for having me. It's been so nice. Anyway, I love talking to you guys. But nice to do it on the pod.

Utsav Somani: Thank you so much, Priyanka. Have a wonderful journey ahead.

Priyanka Kanwar (Co-founder & CEO, Falcon): You too. Bye. Bye. Thanks, Anubhav.

Utsav Somani: All right, Anubhav. We won't trouble you much longer, but let's get started. Thank you so much for powering through. I mean, I can hear that your throat is, of course, definitely down and out, but I really appreciate that you turned up for this segment as well. So for our listeners who are hearing about RupeeFi for the first time, given that you operate in the B2B credit space, maybe take two minutes to just explain what the business does.

Anubhav Jain (Co-founder & CEO, Rupifi): Yeah, so at RupeeFi, essentially, what we started with is, how can we solve working capital and credit access problem for SMBs in India? Now, fundamentally, there were three challenges that we saw why SMBs don't have access to credit. First is, if you look at it from a bank's perspective, most of the SMBs in India require a very small amount, short, in your credit. The op-ex and the cost associated with that for banks is prohibitive. So banks never go behind the smaller, the long tail of SMBs. The second is, obviously, where will the data come for underwriting? The absence of structured data is slowly getting solved. But when we started back in 2018, 2020, it was still a problem. For a legacy bank, I'd say things have not changed much. But with the account aggregator, with a lot of digitization of information, that is still getting solved. The third, I think, and the fundamental problem behind SMB credit has always been discipline and collections. Like, can you really build capability around collecting from SMBs? Because the behavior of an SMB is very different from an individual or a salaried guy. You know, they don't have a paycheck. They don't have predictability of cash flows. So the product itself has to be innovative to ensure that that variability of cash flows is somehow built into your collections. I think we solved all these three problems. And we said that, hey, we'll go after B2B, especially focusing on long tail. And what we did is, we said we'll do it in a way where we solve for acquisition, collection, underwriting at source. So whatever is the day-to-day transaction the SMB is doing, let us just go and power that. That way, I'm not underwriting the SMB. I'm underwriting his B2B or day-to-day transaction. And that is much easier to do because either I'm discounting an invoice or I'm financing a purchase of inventory or I'm somewhere factoring a sales.

Dhruv Sharma: So that way, it's much easier. If I may, how did you first enter the supply chains? Was it OEM first? And also, which sectors did you pick? And what was the rationale behind those sectors?

Anubhav Jain (Co-founder & CEO, Rupifi): Yeah. So entry point GTM was the online B2B. Okay. If you look back at 2020, 2021- Was it like vertical? Agnostic. So we got pretty agnostic to industry or vertical at the beginning. Today, we are not. So that's a learning we've had over a period of time that we need to choose our verticals as well. But when we started, we said that, Hey, 2010-2020 has been the decade of consumer internet in India. A lot of actions that we take as a consumer are all through the smartphone and everything is online. 2020-2030 has to be the decade of everything behind it. So everything behind in terms of infrastructure, B2B. So let's say we buy an iPhone from Flipkart. But to get you an iPhone delivered, there are three other transactions happening at the backend, which are all B2B in nature. And there are companies who are digitizing that. And there is constant need of credit to power those supply chain transactions. So that is where we said we'll go after. Online B2B was flourishing back in 2020-2021. And we said we'll ride that wave. We'll simply embed ourselves inside B2B marketplaces. And we'll offer this checkout credit facility for SMBs who are buying their inventory from these B2B marketplaces. So to take an example, if there is a kirana shop who's buying from Flipkart wholesale, or if there is a agri-input retailer who's buying from, say, a nurture farm or an agri, or if there is a medical shop who's buying from Medica Bazaar or Retail IO by FarmEasy, all of them should have that credit option to source the inventory and then sell it.

Utsav Somani: And so in terms of, I mean, you've described the process and the parts involved, but what are the big challenges? And you mentioned collection being a big piece as well, because SMEs, of course, they don't have steady cash flow and like many other variables in play. So describe the challenges in terms of lending to these players as well and the collection part. And how are you solving for them?

Anubhav Jain (Co-founder & CEO, Rupifi): Yeah, so I think the first challenge is, obviously, justifying the unit economics. Like I said, even though we are using technology and we are solving for acquisition at source, we are solving for underwriting using the transaction data provided by these B2B marketplaces, still, when you add collections and the cost of collections, your unit economics still have to make sense for a 10,000, 20,000, 50,000 rupee loan. Right. So I think the first challenge, in fact, the first approach that we took towards building Ropeify was, we will never outsource collections. We will build collections in-house, we will build collections ground up, whether it's digital collections, whether we require on-ground collections, everything has to be created internally. And I think that has significantly helped us in our journey, I'll say, because we have created SMB collections like nobody else. We have understood the intricacies of variability of cash flows. We have implemented that variability in who we collect from, when to call a customer, and how much flexibility to give. Yeah, absolutely.

Dhruv Sharma: And Anubhav, if we talk about underwriting for a moment, so you said you would use transaction data to underwrite borrowers. How much credit could you give someone just purely on the basis of transaction data? And at what point would you start looking at financial data also?

Anubhav Jain (Co-founder & CEO, Rupifi): Yeah, so I think it's a step ladder. Purely based on bureau or purely based on transaction data. You can only go so much.

Dhruv Sharma: Yeah, exactly.

Anubhav Jain (Co-founder & CEO, Rupifi): So initially, when we started, even the marketplaces were very open. So they said, hey, even if you give 50,000 based on pure transaction data, that's fine with us. At least we'll have some credit given to the customer, let them get a taste of it, let them know some behavior, and we can keep increasing based on how they repay. Yeah. So our initial cutoffs were much lower. Fast forward today in five years, purely based on transaction data, we can still do close to around 5 to 7 lakhs. But anything above that requires us to collect GST or other traditional sources of data.

Dhruv Sharma: But you've still been bringing the time to decision down and down and further down?

Anubhav Jain (Co-founder & CEO, Rupifi): Oh, yes, of course. The first 5,000 cases that we onboarded, I personally underwritten each one of them myself.

Dhruv Sharma: Absolutely. In the real world, the question of Udhari doesn't even start till you've transacted at least 10 or 12 times. But in these contexts, the ones you're talking about, if Flipkart Wholesale is involved and Rupify is involved, even if it's a first-time customer, business customer, you can start by extending credit, right? Yeah, it depends.

Anubhav Jain (Co-founder & CEO, Rupifi): Yes, I think that's a very interesting question. So a B2B marketplace would want us to extend credit from day zero because it becomes an acquisition hook for them. As a principle, we've not done that. Because like I said, we are not underwriting the borrower. We are underwriting the transaction. And if there is no transaction history, I don't have a basis to underwrite. And let me tell you, the one variable out of like probably 500 variables that we have looked at, a cross-credit, transaction data, banking, GST, the one variable that differentiates risk the most is the amount of history I have between the buyer and the supplier. The longer the history, the lower the risk. So, and this is based on so many transactions that we've done. And it was very surprising that if a customer has 18 months of history, very low risk. If a customer has three months of history, very high risk. And this variable does better than your Sibyl score or any other variable in the model.

Utsav Somani: So... All right. Anubhav, I think we're running out of time. Sorry to interrupt you. But just for our listeners to know what the scale of Rupify is today, can you share some recent numbers?

Anubhav Jain (Co-founder & CEO, Rupifi): Yeah, sure. So we've had close to around 250,000 SMBs that we've onboarded and we work with. These are 90% of the retailer category. So it could be a small shop, but industry agnostic. It could be a hardware shop. It could be an agri-input shop, gelada shop, mobile shop, pharmacy, any of these. And our average ticket size is very low. Average credit limit that we approve is around a lakh. And the average transaction that we power is around 10,000. And yeah, we would have done close to around 7,000 crores till date in B2B credit.

Utsav Somani: So yeah, that's the... Do you have your own NBFC as well? Do you have an NBFC license as well?

Anubhav Jain (Co-founder & CEO, Rupifi): No, we operate as an LSP under the RBI digital lending guidelines. But we plan to have one.

Utsav Somani: All right, Anubhav, get better soon. Thank you so much for giving us your time today.

Anubhav Jain (Co-founder & CEO, Rupifi): Thank you so much, guys. Sorry for this. No, no, thanks.

Dhruv Sharma: No, thanks for honoring your commitment. Yes, thank you.

Utsav Somani: All right, listeners. Thank you so much for tuning in. We'll see you on Friday for our final stream of the week at 4 p.m. Thank you. Have a good rest of the week ahead.