Its a spiral in motion – with the advent of eCommerce and more rapid channels to reach a national market, brands keep increasing their frequency of product launches. This, in turn, has created a huge untapped aspirational college student market. This base has the latent intent to purchase and keep up with trends, but has very limited financing options – upfront payments are tough for this segment of customers.
There are multiple entities, including banks, who provide Digital Product Financing focusing on the secured (credit card / debit card) segment. A huge segment of consumers that don’t have access to traditional credit are unfortunately left behind. The entire challenge with this segment is inspecting the ability to pay, along with the security of collecting monthly instalments.
In Buddy, the founders, Rajan and Deepak, believed that college students do have the ability + intent to repay for the product purchases; the key is to a) quantify the ability over a particular period of time, b) enable it through flexible payment plans curated for them and c) delivered along with a robust collection engine.
Buddy lets college students shop online from various ecommerce websites and split the payment into EMIs. Through a combination of online signals and offline checks centered around the student, Buddy is developing (and constantly improving) its proprietary credit engine, which then provides immediate confirmation or rejection on the product purchase. In this cycle, the entire process of product identification, loan processing and collections will be automated through online and offline mechanisms.
The founding team of Rajan and Deepak have considerable experience managing risk and e-commerce at scale in their previous avatars at Flipkart and PayPal-eBay.
Globally, especially in mature examples such as the Chinese eCommerce market, multiple players like JD and Tencent have focused on the college student segment as an acquisition channel to reach consumers from the inception of their purchases.
Buddy would eventually provide college student credit cards with variable limits based on their proprietary risk engine. Every college student sees his or her education as a path to employment and a great job. Along the path, the college experience just became much richer for every student, through their new Buddy.
Buddy is a Blume portfolio company based in Bangalore. With the rise in student purchasing power and aspirations, there is a need for a customizable lending platform to manage their needs. Buddy, through it’s proprietary and constantly evolving credit engine, collects and analyzes 1000+ online and offline data signals, which help segment students into different risk profiles translating to a credit score. Blume has been a believer for some time in O2O – Online to Offline, accompanied by a full-stack delivery experience – we recently announced our investment in Turtlemint (our insurance investment from mid 2015, the last investment from Fund IA) and Zopper (one of our emerging stars from Fund I).
Investment announced: 2016 (Blume Fund II).