The Fact Maker

WeRize raises funding of Rs 120 crores ($15.5Mn) from British International Investment, Sony Innovation Fund and existing investors

  • WeRize is already operationally profitable with an Annualized Revenue Run Rate of USD 10mn+ and expects to achieve EBITDA profitability at group level in the next few months
  • Aims to onboard 50 lakh customers across 4000 cities by 2025
  • The freelancer-driven social distribution platform has enabled WeRize to manage a network in 1000+ cities and achieve the lowest customer acquisition cost in the segment

Bangalore    : WeRize, India’s leading full stack financial services platform focused on addressing the needs of small-town India, today announced that they have raised USD 15.5mn (Rs. 120 crores) from new investors, British International Investment (BII), the UK’s development finance and impact investor – formerly known as CDC group and Sony Innovation Fund along with existing investors 3one4 capital, Kalaari Capital, Picus Capital and Orios Venture Partners. The company will use the funds to accelerate growth – build new financial products for its customers, expand and improve the technology platform as well as onboard freelancers in 1000+ new towns that it is set to enter. With this round, the company has raised a total sum of USD 25.75 million. WeRize is already operationally profitable with an annualized Revenue Run-rate of USD 10 million as of May 2022 and expects to achieve EBITDA profitability at group level over the next few months.

Vishal Chopra & Himanshu Gupta, Co-founders of WeRize said, “We are excited and proud to have large investors like British International Investment and Sony Innovation Fund back us in the new round along with the faith reposed by all our existing investors. Our unique full-stack approach where we manufacture as well as socially distribute financial services for underserved customers has helped us achieve rapid scale while maintaining solid unit economics. We have reached $10Mn+ revenue run-rate while doubling our revenues every 6 months and are just a few months away from being EBITDA positive at group level. These funds will further help in doubling down in our mission to profitably provide financial services to the underserved customers in 4000+ small cities of India.”

Srini Nagarajan, Managing Director and Head of Asia at British International Investment, said, “BII remains committed to backing businesses that are creating tech-based solutions that foster productive, sustainable and inclusive economic opportunities. WeRize’s technology and innovative distribution model will help drive financial inclusion at scale. We are thrilled that our patient and flexible capital will support the company’s ambitions to expand access to credit and other financial services, ensuring underbanked people and low-income families can secure finance that will uplift their lives and livelihood.”

Anurag Ramdasan, Partner at 3one4 Capital said, “WeRize has built a phenomenal financial enterprise that has scaled pan India and disbursed highly valuable financial services and at incredibly low cost. We’re super excited to have seen this journey from inception till now and are looking forward to partnering with them again as they scale it even further.”

Gen Tsuchikawa, CEO and Chief Investment Officer at Sony Ventures Corporation, said, “WeRize has built a profitable business delivering full-stack financial services to millions of previously underserved middle-class customers in India. We look forward to supporting the team as they expand their financial product offerings and technology platform to further accelerate growth.”

Founded in 2019 by Vishal Chopra and Himanshu Gupta, WeRize is building India’s largest full stack financial services brand for 300 million underserved middle-class customers who live in 4000+ small towns of India. This customer segment is not served by private sector banks, Insurers and Mutual Fund companies due to their low ticket-size and lifetime value and is dependent on PSU/Govt. banks. PSU/Government banks rarely provide financial products beyond basic savings accounts and these customers lack access to unsecured loans, credit cards, health and life insurance and investment products. WeRize manufactures innovative Credit, Savings and Group Insurance products designed for this customer base keeping in mind their needs, requirements and purchasing power, with a view to add a layer of financial security to their lives and enable access to credit.

While customers in these geographies use smartphones, they need proper guidance and support when purchasing the right financial products for themselves. So, a pure digital model doesn’t work for this segment. WeRize has innovated on this front through its ‘Finance ki online dukaan (Social Shopify of Finance)’, a first of its kind social distribution tech platform in the financial services space that educates and enables local financially literate freelancers across these small towns to source business through online and offline channels, recommend the right financial product(s) to customers as well as provide after sales support. These freelancers, who are located in more than 1000+ towns and cities, earn as much as INR 30,000 a month from WeRize in commissions.

For WeRize, its social distribution platform supported by financially literate freelancers means exceptionally low cost of customer acquisition (CAC) and operations costs compared to both fully digital and on-the-ground financial services providers. Digital conversions among this target group are way lower when compared to upper income customers in metros and hence pure digital CAC doesn’t work for this segment. While companies like LIC and Fino Bank also rely on freelancer distribution, they deploy local on-field teams/branches to manage freelancers in every city. That results in very high CAC and operations costs for such companies. WeRize on the other hand, has been able to acquire, train and manage thousands of freelancers in 1000+ cities only through its tech platform and without any feet-on-street team of its own. This results in a highly profitable business model for Werize.