During Blume Day 2020, Gaurav Munjal of Unacademy spoke about how he wanted to be known as the founder of a unicorn before he enters his 30s. Unacademy was valued at $500 million at the time, and Munjal’s birthday was hardly six months away. The very next month, the world faced a once-in-a-century calamity, and Munjal’s ambition seemed unreasonable. Come October, Munjal had done what he envisioned, just six days shy of his 30th birthday.
Rajan Bajaj of Slice was in the audience during Munjal’s talk on Blume Day. He was only 27 at the time, but was determined to emulate this feat. His company had not raised a full priced round since their Series A by FinUp in 2018, when it was valued at $22 million.
Bajaj launched Mesh (which later became Slice) in 2015. The IIT Kharagpur lad quit his plush job in Flipkart’s product team to build a business that helps young consumers like him buy gadgets and electronics easily. Fortunately for Blume, our colleague Adit Parekh had been working on a thesis at that time that reflected Bajaj’s idea. Parekh believed that while ecommerce was growing steadily, upcoming businesses should help digital natives carry out white goods purchases with the least amount of friction.
At that time, Mesh’s business involved letting customers rent gadgets by paying a monthly fee, with the option of buying out the same at any point of time during the tenure. Parekh met Bajaj at a cafe in Koramangala. Conversations followed and Blume committed to investing INR3 crores in the company. This was a decision in a pre-Jio world, with millions of youngsters just beginning to get access to low cost data.
Even after the investment, Mesh had a long and arduous journey ahead of it. The business model involved getting OEMs of consumer durables firms to offer their products under a financing model, while also onboarding new customers. The rental market was not taking off, and it was tough to make OEMs and financiers see the merit in Mesh’s vision. Blume was convinced the idea would see its time, and so we pieced together another round of capital infusion along with a few angel investors. The company went through a couple of makeovers at this time. Bajaj launched Buddy, which later became Slicepay, a BNPL product aimed at helping students make purchases.
GenZ is hardly the market of choice for credit companies, but Slice wanted to change this. Mindful of the limited capital at hand, Bajaj built a massive base of young consumers and made Slice the preferred credit product both within and outside college communities.
A BNPL product comes with the usual challenges of thin margins and the net revenue limiting growth. To counter this, Baja applied for an NBFC license in 2018 and got the same. This was Slicepay’s segue into becoming a credit card challenger. Getting into this space was the natural progression for the company, and Bajaj soon dropped the “pay” to rebrand the company as “Slice”, the name that continues till date. Post partnership with Visa, the product was off to a good start.
As I reflect on my interactions with Bajaj, I recall his high intellectual honesty and agile decision-making ability. A long-term basketball enthusiast, Bajaj’s leadership style reflected the ethos of sportsmanship. I never saw him crib when things didn’t go his way or blame stakeholders for slowing him down, which, I believe, is a hallmark of a resilient founder.
Slice of the future
Sometime in 2020, Bajaj realized that not a larger number of customers finished the onboarding journey and got the Slice card. He went over the product enhancement journey and redrew the funnel. Soon after, closures jumped manifold. From 7,000 cards a month in late 2020, Slice now clocked over 200,000 cards last November, growing 15-20% month on month. Customers can now start using the virtual card within minutes of the initial application and successful KYC. The fact that similar businesses are shooting for this segment is testimony to Slice’s ingenuity.
Slice is fast becoming a mainstream product with existing credit card customers choosing it as their secondary card. Slice was one of the preferred ways of acquiring a credit card during lockdowns because of its ease of onboarding.
The credit card industry in India is massive. The incumbents have not necessarily focussed on people new to banking (as opposed to just credit), an unfulfilled need that Slice can use to its advantage. I am convinced that Slice is on track to become a credible caste study of a successful neobank.
Equity and debt investors often ask me if a young founder can ably run a credit business. I have seen inspire a set of high quality professionals to co-own the Slice vision. At a time when VCs were largely generous while backing fintech companies, Slice was comparatively under-funded. I believe this frugality is what will help Bajaj keep his focus on breaking even and his initial vision even as the company grows rapidly.
We have bridged the company thrice and the growth thrust was provided by our Japanese shareholders – Gunosy. Blume has backed Slice through its Opportunity Funds as recently as 2021, just months before their Unicorn round. We continue to be the only Indian fund on the newly minted unicorn’s captable. With Tiger Global and Insight coming in, there is validation from the global investor community as well.
It wouldn’t be wrong to say that the company Bajaj built is a slice of what the next generation’s aspirations are today – the ability to make financial decisions independently. In the next few quarters, we hope to witness Bajaj’s obsession to make Slice as the largest credit product of the country – come true.