After setting up one of India’s biggest financial inclusion networks, former CEO and CFO start up


Kaleidofin is a financial platform for the informal sector, provides solutions tailored to the customer’s goals.

At a glance

Startup: Kaleidofin

Founders: Sucharita Mukherjee and Puneet Gupta

Year of launch: 2017

Where it is located: Chennai

Sector: Financial services

Problem it solves: A financial platform for the informal sector, offering solutions tailored to customer’s goals

Funding: $2.8 million in seed funding

Investors: Omidyar Network, Blume Ventures, Professor Shlomo Ben-Haim

If you have delved into the world of financial services, you would have heard about Sucharita Mukherjee and Puneet Gupta. The duo set up, and for more than a decade, built various engines of the IFMR group, an NBFC that focuses on financial inclusion in various sectors from rural financing to informal sector financing.

After leaving their jobs at IFMR last year, the duo is at it again. And their newest venture focuses on providing financial services tailored to the informal sector.

Sucharita Mukherjee and Puneet Gupta, Founders of Kaleidofin

Why start up again?

Joining YourStory on a call, Sucharita and Puneet explain that over the last decade, they have been working to reach the informal economy in the country either through physical access points or smartphones. Over the course of time, access points to this economy grew and multiplied, either through banking correspondents or through other initiatives like payments banks.

Further, information about the customer has also multiplied with this development. More than 100 million credit records have been created over the last five years through this transaction data.

As Sucharita says,

“Access is not equal to making financial products work for you. We thought that we have to make finance work, since the industry is not evolved to be customer-centric. Further, product development from a customer perspective is missing.”

And that laid the ground for Kaleidofin.

“If you see advertisements, financial products seldom represent the customer’s side of the story. They mostly communicate the product side only. That’s where the idea of Kaleidofin germinated,” she says.

Punert Gupta, Founder, Kaleidofin

While the company was incorporated in July last year, the duo started working on the product only in October.

“We didn’t even have an idea then,” Puneet recalls. By November last year, the company had its proof-of-concept ready. The app was ready only by the second week of January this year.

Mixing it up with Kaleidofin

Kaleidofin is essentially a financial platform for the informal sector, which provides solutions tailored to the customer’s goals.

Giving an example of their target segment, the founders state, “Take a mason who has work only eight months of the year. In monsoon time, there’s no work, so there isn’t any income. A solution like ours, with a mix of savings and credit, can help solve small cash crunches.”

The company understands the risk profile of the consumer before advising on respective plans. The variables of analysis include family structure, skill sets, occupation, geography, and whether the location they reside is prone to natural disasters.

Sucharita Mukherjee, Founder, Kaleidofin

These variables are further married with credit bureau and saving account information.

Aligning the real needs of the underserved segment in mind, the platform also provides tailored plans that combine different financial products. These include:

  • Lakshya is a plan for regular investments in a debt fund, considering the fragile nature of a customer who can’t take a lot of risk. While this saving plan is goal-oriented, there is an added layer of goal protection like insurance. The plan also looks into providing a liquidity line for urgent needs like hospitalisation of a family member or injury.
  • Udaan is for households that have a surplus and can take risks. The plan gives them some equity exposure for higher returns. Close to 20-40 percent of their plan is equity exposure.
  • Ummeed is a solution tailored for households with volatile incomes and expenses. These households can save only small amounts and the key objective is to inculcate the discipline of saving among them.
  • Sakhi has its own variants but is designed as a maternity management programme for newlywed couples. Once the couple plans a baby, they can start saving for the cost through this plan. This also includes insurance for any possible complications.

The founders claim that while observing previous financial models, they have introduced some nudges for their customers. Sucharita explains,

“The bank saathi will show up at the doorstep of the customer, which will motivate them to save and keep the amount ready. We will also allow customers to give an electronic mandate, among other things.”

Earlier this month, the company raised $2.8 million as a part of its seed round led by Silicon-Valley based Omidyar Network, along with participation from Blume Ventures and individual investors including Israeli serial entrepreneur and inventor Professor Shlomo Ben-Haim.

The funds will be used to accelerate customer acquisition across India, expand the company’s network of strategic partners, and enable deep investments in technology and analytics.

Distribution and partnerships

Kaleidofin has partnered with six mutual fund houses, including ICICI Prudential, Aditya Birla, and Franklin Templeton. For insurance, it has partnered with 3 insurance companies, including Bharti AXA and ICICI Prudential. It is also in the process of on-boarding a bank, which will provide Kaleidofin’s customers basic and recurring bank accounts.

The startup has also partnered with a bank to power its credit operations.

Sucharita says Kaleidofin provides cheaper interest rates for credit at sub 18 percent, which otherwise are pegged at close to 50 percent if customers go through informal channels.

The founders state that the platform distributes these products through either smartphones, or by leveraging their ground network of agents, field officers or ‘bank saathis’ of their partners.

While 30 percent of Kalediofin’s customers own smartphones, 70 percent lack a private smartphone and are targeted through field agents.

In the near future, the company also plans to have an IVR and call-centre network, which will help rural customers manage their plans and even get a call back by giving a missed call.

At present, Kaleidofin has a partnership with Seva Bank and microfinance institution Sonata Finance, where it leverages their field agents, and sometimes targets their customers with various financial plans. The company has close to 250-odd agents on ground, who are being trained on how to enrol a customer. The company expects to take this number to 3,000 ground agents through its partnership with Sonata alone.

Sucharita adds, “We are also looking at partnerships with corporates whose employees become our customers. These are essentially manufacturing plants and other small industries. Such companies have a huge problem of attrition even if a change of Rs 2,000-3,000 is sought in salaries. However, the cost of training these employees is huge and hurts the company, if they leave. Hence, our products can be leveraged by employees to gain higher cashflows from their income.”

In terms of geographies, the company is presently operational in three locations, including Chennai, Ahmedabad, and Bihar. Kaleidofin plans to aggressively tap Karnataka and Odisha in coming days.

The team at Kaleidofin

Revenue generation

Though still in its early days, Kaleidofin is figuring out its revenue pipelines. It plans to charge an advisory fee of Rs 20 going forward for advisory, and take a trial commission from financial partners for deploying products.

At present, the startup has close to 1,500 customers.

Puneet explains, “We believe that our growth will propel with the addition of the more and more field agents. Our first goal is to set things in motion. We would then want to look at conversion rates. It is a steep learning curve for us as well.”

But in a market where financial discipline is tough to observe how does Kaleidofin plan to make sure customers maintain it?

Sucharita explains,

"The platform is designed to provide small nudges and reminders for contribution towards savings and the customer's goals. Also, we will also leverage the Bank 'saathi' network, who will show up at the customer's doorstep, which might also be a motivational factor to not slack. The point is to also make it convenient for the end customer."

The informal sector today contributes to a huge opportunity for companies. Further, there are already microfinance institutions catering to the problem.

It was reported last year that the microfinance industry has seen tremendous growth over the past five years, growing at a 45 percent CAGR.

There are several marketplaces like BankBazaar for the urban customer to buy financial products from. However, a bouquet of financial product offerings for the informal sector continues to be an unexplored opportunity.



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