Investments in fintech are definitely topping the market numbers and numerous entrepreneurs are also choosing the segment for their first and even second gigs. However, reports are sprouting up that show the other side of this coin.
Collection, debt default, liquidity crunch are a few aspects of fintech that plague the industry and the startups, banks, or NBFCs operating in it.
One such firm is Rubique Technologies. The financial products marketplace has had to scale down its operations amidst the liquidity drought. As a part of this scale down several employees at the firm have been laid off too. Some are said to have left on their own accord. The overall headcount account has went down from 100 to 47 in November 2018 after long delays in salary payments.
The company shifted focus from chasing numbers to solving the evergreen ailment of fintech – collection.
The CEO of Rubique – Manav Jeet, in a conversation with TechCircle, cited this as the reason numerous employees chose to leave the firm when they couldn’t deal with the stress that works behind the collection. He also mentioned how employees tend to choose stability over the risk that goes along with startup passion, but it is rather understandable from the employee perspective.
He also talked about how a primal factor behind this scale down is that BFSI sector at large is facing liquidity problems and he blames debt defaults by IL&FS for the same as it brought caution around investment in the lending industry.
To control the impact of the same in Rubique, the firm had rationalised cash outflows like infrastructural payments, business and support expenses, admin cost etc. Sources in functions like tele-calling, marketing, business support, and tech were trimmed down.
To cope with this crisis, the firm is also looking to raise a new round from strategic investors. The one thing that the firm maintains strongly is that they aren’t shutting down, and are working hard towards getting back on track.
Rubique, as of now, provides credit cards and three types of loans – personal, business, and loan against property – to the buyers. Till date, the loans disbursed by the firm amount to Rs 3,522 crore and more than 1.5 lakh credit cards.
The marketplace run on commission saw Rs 25.2 crore worth operating revenues in FY18, where the losses stood at Rs 23.18 crore. In the Rs 25.2 crore, Rs 12.42 crore was contributed by loan disbursal and Rs 12.38 crore by credit card sales. The financials for FY19 are yet to be filed.