“EDITION 18”

Published: 6/5/2020

“EDITION 18”

I just hung out with a bunch of fintech people courtesy of Fintech Today (https://fintechtoday.co/) [Great US Fintech newsletter FYI], so think it’s only fair that I do a Fintech issue today. I came across a cross-border Indian fintech/education company that I’m really really excited about (and I’m never usually this excited about new companies), and Paytm seems to be doing some interesting things lately, I have no clue how it’s going to pan out but let’s see:

  • https://tcrn.ch/2Tkw4Bx (TechCrunch): Leap Finance raises $5.5M from Sequoia
  • Leap Finance is company that offers college loans to Indian Students studying abroad in the US.
  • Over 200k students from India study in the United States each year, and getting loans in the US is impossible. The current solution is to take education loans from India itself, but interest rates are pretty high (can be over 13%).
  • Which is where Leap is coming in, since they only let students students who are attending certain colleges (& programs) apply for loans on their platform (currently only Graduate courses), they are able to underwrite lower rates (8-10%) because the colleges and programs are highly competitive.
  • The reason why I really like this company is because: i) the market is huge (especially when they expand to the UK, Canada); ii) The loan amounts are fairly high (US colleges can cost upwards of $50-70k/yr or ₹35L - 50L/yr); and iii) They are significantly better than the existing solutions (lower rates, and they know how to underwrite based on data from colleges)
  • With the “American Dream” still going strong, I expect them to make a lot of waves in the upcoming years.
  • http://bit.ly/38k5DjU (Entrackr): Paytm gets an Insurance License!
  • Paytm has recently secured an insurance brokerage license from the Insurance Regulatory and Authority of India.
  • This would let the payment company offer insurance products to it’s 200M+ users and 10M+ merchants, and is beginning by offering insurance products across a couple of categories including vehicular insurance, health insurance & life insurance.
  • This is part of the company’s larger strategy to be the “one stop shop” for financial services for both consumers & merchants.
  • They already have the popular wallet + UPI payment feature, a mutual funds investment platform called Paytm money, as well as a bunch of financial services for merchants (including working capital loans).
  • Paytm is on a mission to capture the entire financial services market in India, and while I don’t know if they’ll achieve their target, I commend the company for innovating and experimenting.
  • Feedback & ❤️ always appreciated

    More tomorrow :) BONUS (Tweet of the day): https://twitter.com/amrishrau/status/1234887818804989954