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Ankit Singh, Jawaid Iqbal and Anubhav Jain met through common LinkedIn connects and instantly hit it off. While Anubhav had previously built Qbera, a marketplace for unsecured personal loans, Jawaid was with Google, and Ankit had worked with the likes of MoveInSync and Ola. 

While brainstorming different ideas for a startup, they came upon the issue of working capital for small and medium enterprises (SMEs). Then, after close to 18 months of research and whiteboarding, the team realised working capital continues to be a largely unsolved problem. 

“And the only way to solve it for even the smallest SMEs was through embedded transaction use cases, which could solve it at source and enable more business for them. This triggered us to explore the business-to-business (B2B) commerce use case and we saw that there were many B2B marketplaces that were coming up and solving for the three pillars – product, pricing and supply chain. Where we could add value was the fourth pillar — in B2B commerce, credit is a hygiene factor,” says Anubhav. 

It led to the birth of Rupifi, an embedded B2B payments player with credit access. The main anchor is the B2B marketplace, which is the core consumer, and the end-user is the SME transacting on the marketplace. 

What does this product do? 

Rupifi provides a set of APIs for the marketplace to integrate and be embedded in the journey of the marketplace app for the end SME user. In addition, they also provide real-time insights and dashboards so marketplaces can track all activity

The core product of a B2B Book Now Pay Later (BNPL), which the SMEs use to pay the B2B marketplaces, solves for working capital and credit needs of SMEs. The focus is on the mid-to-long tail of SMEs, which ensures the team can open new segments and provide access to those retailers who would otherwise not get it because of reasons like being new to credit (no bureau footprint) or being from Tier II/III towns. 

“With our BNPL retailers, we can source their inventory/supplies on credit and pay after 15/30/45 days, thereby managing liquidity/cash flows better. We started right in the middle of the pandemic in July 2020. We were cautious in the initial months, getting customer feedback and implementing it in the product for the first couple of quarters, also focusing on stabilising the portfolio during the second wave of COVID-19. Since then, we have seen significant growth in our monthly volumes (TPV), with almost 25X growth coming in the last four months (our October Total Portfolio Value (TPV)) compared to our June TPV),” says Anubhav. 

After talking to B2B marketplaces, he says the team understood that even the smallest B2B marketplaces needed to offer 15 to 45 days credit to their SME consumers. And there was a need for an organised, tech-product for doing this. Hence, the need to embed the B2B BNPL option as a payment instrument. 

Building BNPL

“We have seen significant evolution of our B2B BNPL product over the past year or so. We started with an initial use case of providing 15-days credit to FMCG/kirana retailers on one of the B2B FMCG marketplaces, also because essentials were the preferred segment to launch around July 2020, owing to lockdowns and restrictions on most other categories at that time,” says Anubhav. 

He adds that from then to now, they have refined the product for pharma and medical retails where they provide 30-day credit. In the fashion and home furnishing segments, the company provides 45-day credit, whereas the B2B agri-inputs sector gets a 60-day credit. 

“On top of this, we have added multiple flexi-payment options for the retailers depending on the shelf-life of products in their industry, also tailoring the credit cycle, tenure, and pricing accordingly. All these have been built as configurations in our Product for the B2B Marketplace to choose,” says Anubhav. 

Competition is limited, with names like ePayLater and Davinta in the same segment. However, the team also expects more players to enter this segment as B2B commerce and Infrastructure scales further in the country, and the market is large enough for a few of them to become very large. 

“At Rupifi, we are focusing on differentiating through our approach and customer experience – we solve everything keeping in mind that our B2B BNPL product is a payments instrument used by SMEs on B2B marketplaces, and not a typical lending product,” explains Anubhav.

“Every metric that we optimise for should be similar to what you would optimise in case of a checkout experience, and not in case of a lending/credit experience. This way we were able to focus on higher conversion rates, higher success rates and driving greater adoption, instead of the usual lending metrics like Risk and Collections (which were also optimised but not as the North Star Metric),” he adds. 

MVP and first product 

While not perfect in terms of look and feel, the first product did manage the basic job. Anubhav explains the team put together a set of user screens for onboarding SMEs on B2B marketplaces. They did this by providing a URL that would open in the web-view of the B2B marketplace App, and then the team would run a few screens to onboard the SMEs on their BNPL product. 

The Credit Line Approval was provided within 24 hours, through a manual approval and then the limit was set up offline by the B2B marketplace. 

“This limit was then available for the SME to use in their next order. Thus, if you notice, there are a few breaks in the customer journey, from order to checkout to payment, but we were able to achieve the objective of providing an SME 15/30-days credit on the B2B marketplace. Most of the initial product was coded by a four-member team, with significant lines of code written by Jawaid himself,” says Anubhav. 

He adds that the startup had already raised a pre-seed round from angel investors which provided the necessary capital and resources. They signed up the first B2B marketplace in March 2020, and soon after, the lockdowns happened. 

“The lockdown gave us the time to build our product and by the time our client marketplace was ready to start business again around June, we were ready with the first product,” adds Anubhav.

The first key feature of the onboarding product for the B2B BNPL product was its simplicity and frictionless journey, which required minimum documentation from the SME/retailer. Anubhav explains the team relied heavily on transaction data or cash flow data based decisioning instead of asking the user for a lot of information. 

This also ensured that the team could run pre-approved offers on B2B marketplaces using their historical data, which led to a better customer experience due to lower rejections.

What the team also learned was that since the SMEs were ultimately the marketplace’s customers, providing the best experience was key to building a stronger relationship. 

“Hence, we created a real-time dashboard for the marketplace on Day 1, which provided them complete visibility and insights into all activities and transactions happening through Rupifi. Rest assured, we were getting feedback from both users (the SMEs opting for the B2B BNPL product) as well as the customers (the stakeholders at the B2B Marketplaces),” says Anubhav. 

The first version of the product ran for almost a year, with constant improvements. A layer of marketplace-specific APIs was added, which was integrated with the transaction/ordering systems of the marketplaces through those APIs to capture order-level details and order status on a real-time basis. A customer/SME facing statement of account was also added to provide visibility to the BNPL user on their usage, transactions, upcoming dues, and payments. 

Understanding user needs

“We even built the architecture in a way that it was configurable across sectors, which helped us expand into FMCG, food, HoReCa, pharma and fashion use cases without redoing the product development in any form,” informs Anubhav. 

During the first year, the team received positive feedback from the users with respect to providing them easy access and faster turnaround time — a core focus for the team from Day-0. 

At the same time, they also understood user pain points when it came to utilising the BNPL credit line or providing KYC documents while onboarding (due to digitally inexperienced users, who often even needed to be taught the benefits of the product too).  

These inputs helped the team build a strong customer support team that is available across channels like SMS, WhatsApp, and call to these SMEs. 

As the team started to go deeper into the use case of a B2B marketplace, they realised that a B2B BNPL product is not simply a deferred payment option. As they started scaling, they understood various edge cases which were not insignificant in terms of proportion – like delivering partial or damaged orders, refunds or even end SME customer wanting to repay for his B2B credit line using cash. 

“These are uses cases which we came to know through user feedback, and we knew that a B2B BNPL is not just a one-time payment or credit instrument, it is a complete experience of driving a B2B commerce transaction to closure from a money flow standpoint. Thus, with every such feedback from the users, we started discussing the top of the list items with the respective B2B marketplaces, and then worked backwards internally to prioritise and build those features which everyone wanted from our product,” explains Anubhav. 

The first consumers 

The first 100 to 200 customers gave the team feedback, but the team needed more data to convert those into product features. As they started to get more SMEs on board, the team started seeing a list of feature requirements which became the starting point for the team to go from MVP to a fully market-ready product, which then led to product-market fit as they touched 5,000+ repeat SME users in July/August 2021. 

“As we kept evolving the product, we got some important learnings from the market, like the number of steps an SME had to undergo in the onboarding journey. We reduced the same over multiple iterations from around 15 when we launched the MVP in July 2020, to presently around 4, which has been done using a combination of running algorithms in the back end, pre-population of data using deep integration with marketplace and rounds of iterations in the UX design,” says Anubhav. 

Another important learning was providing a pre-approved B2B credit amount to every SME on the marketplace app on a real-time basis at the point of checkout. Once they had deep integrations with B2B marketplaces, the team was able to achieve as high as 90 percent approval rates and drive superior customer experience for SMEs using a combination of transaction/cash flow based underwriting, unique URLs for real-time offer creation and dynamic journeys basis the data inputs at every stage. 

“All the above were done along with the core objective of standardising user experience for all SMEs on the B2B Marketplace, irrespective of their size, credit profile, geography, or balance sheet provider. Finally, localisation was very important for us as we had to cater to SMEs across India, and in addition to English, we had to present information in languages such as Hindi, Marathi, Tamil, Kannada, and Telugu,” says Anubhav. 

Some of the key growth highlights: 

1. 30,000+ active SMEs across 6,000+ pin codes and 250+ cities
2. B2B marketplace clients across FMCG, Pharma, Food, Fashion, Agriculture, Electronics and Electrical companies
3. 80 percent+ repeat rate on average, month on month
4. 100,000+ transactions per month with transaction amounts ranging from as low as Rs 500 to as high as Rs 5,00,000
5. 40 percent new credit SMEs/retailers and >95 percent being small proprietorships

Future plans 

“During our journey, we came across multiple interesting solutions — like a location-data based insights player that provides interesting information about an entity based on their location. We are currently working with them to use location level affluence, footfall, consumption, and purchase information and attribute the same to a particular retailer’s assessment in our models,” adds Anubhav. 

The team is also currently using a no-code application provider which lets them create workflows for their last-mile agents to get, complete and monitor their tasks on a real-time basis and connect the outcomes/status of these tasks with the back-end systems

“Today for some of our B2B marketplace clients, we power around 25-30 percent of their GMV every month through our B2B BNPL product. This is expected since, in B2B commerce, every SME requires credit for purchases of their supplies. With our B2B BNPL Product, we aim to touch 40-50 percent GMV in the next quarter,” says Anubhav. 

He adds that the plan is also to further scale B2B Payments offerings by providing B2B complete checkout experiences to these marketplaces, and solve for every step of the SMEs’ journey.