This former YES Bank President’s startup claims to have reached retailers in 5000 pincodes by just word of mouth
Nearby Technologies is a fintech startup that empowers retailers through its mobile app, PayNearby and also helps retailers across the country earn additional revenues by offering digital financial services.
At a Glance
Startup: Nearby Technologies
Founders: Anand Kumar Bajaj, Rajesh Jha, Yashwant Lodha, Subash Kumar
Founded in: 2016
Where it is based: Mumbai
Sector: Fintech and Hyperlocal
Problem it solves: Helps retailers increase revenues by providing hyperlocal services as well as sell financial products to the bottom of the pyramid.
For Anand Kumar Bajaj, former President and Chief Innovation Officer of YES Bank, the problem was clear, ‘Retail was evolving but retailers were not.’
What was the solution on hand? To make every retailer in the country adapt to an efficient digital environment.
Emboldened by the idea of starting up, Anand chose to part ways with the Bank in 2014 to work on a fintech venture and realise this vision.
Started in April 2016, Nearby Technologies, his B2B2C venture aims at partnering with neighbourhood retail and kirana stores to offer digital financial services, which includes being an Aadhaar ATM, deposit facilities, utility payments as well as remittance and hyperlocal services.
The company also looks to work as financial agents allowing customers to avail financial products like mutual funds and insurances.
Anand says it was a long shot, one that needed a strong team to execute what they thought the impossible.
While deliberating on the startup, Anand got in touch with his friend Rajesh Jha. The duo had known each other for 20 years, having worked together at ICICI Bank, in the field automation of technology.
When Anand got in touch, Rajesh was running a wealth management company, which looked at HNIs to invest ticket sizes worth a crore in equities.
Rajesh and Anand aren’t the only co-founders in the business.
When, Anand was leaving YES Bank, Yashwant Lodha who was working as a product manager at the bank left to join the startup.
The last founder to join the business was Subhash Kumar who was invited to manage the operations of the business. He had earlier served as the COO of Hermes i-ticket Pvt. Ltd, which was similar to Nearby Technologies, helping customer’s access financial services through local kirana stores.
The economics of business
Leveraging the trinity of Jan Dhan, Aadhaar, and Mobility, Nearby Technologies equips retail stores with its PayNEARBY app to effectively register as a Business Correspondent and offer the A.B.C.D. of financial services, namely:
- Aadhar-based banking services
- Bharat Bill Payment System for utility bill payments for over 100 billers across India
- Cards payment without the need for a POS machine enabling card less transactions
- Domestic remittances or instant money transfer anywhere across the country
Additionally, using location-based GIS services, Nearby Technologies enables ease of cash management for corporate entities that have large on-ground teams to conduct cash transactions in the market.
The company has also been working towards increasing the penetration of financial products like mutual funds or insurances, by making it available at these kirana stores.
Anand explains, “Our vision is to make it as cheap and simple as buying a packet of biscuits or detergent at a kirana store.”
The company also has launched its hyperlocal delivery service, BuyNEARBY in January this year. It helps users identify kirana stores in their vicinity, thereby increasing business for these retail stores. The delivery is done by the kirana stores, which allows them to tag all orders and deliver within 30-50 minutes.
“It is essentially based on the concept of consumers calling their local kiranas to deliver groceries and small items. With this service, small stores will get a better visibility of their consumers, while helping them grow their business,” adds Anand.
The company has piloted the service with 600 odd consumers around the Andheri area in Mumbai. At present, the retailer can store numbers of local walk-in customers and invite them to use the app.
It is also working with big retailers like Metro Cash and Carry to apprise customers about this hyperlocal programme.
The service is free at present, but the company plans to monetise this programme to help bigger corporate organisations and retailers target their customers better.
Over the last two years, the startup has been working arduously to expand its coverage of retailers on the ground.
According to the company, it has a coverage of close to 180,000 retailers on ground, across 5000 pin codes across 15 states. Acting as banking correspondents, these retailers are geo-fenced to provide services in their vicinity up to 500 meters.
Anand says, “All this is organic and based on word-of-mouth, with no promotions done.”
Nearby Technologies’ claims its solutions run 140,000 transactions in a day, and have close to 32 lakh senders and 55 lakh beneficiaries’ accounts.
According to Anand, the average ticket size of a transaction for Aadhaar ATM (withdrawing cash) is Rs 2,700, while for remittances it can go up to Rs 3,020. The company has a partnership with YES Bank to power its AEPS (Aadhaar Enabled Payment System) transactions.
For bill payment it is around Rs 280, while ATM deposits run around Rs 1,200 of an average ticket size.
Retailers and banking correspondents are incentivised for each transaction and receive a percentage as commission for remittances, withdrawal, and other services offered by the PayNearby platform.
Nearby Technology has also partnered with Safe Gold, allowing customers to accumulate savings in the form of gold. The services also include the tie-ups with with payment gateways Desk and CC Avenue to power its digital payments, and with Rupay for issuing prepaid cards.
A chunk of its revenues comes through selling of financial products through its offline retailer network. The company at present has close to 2.8 crore unique customers on its platform.
While having raised one round from friends and family, the founders are looking at raising funds to scale up.
Recently, bigger players like Paytm and PhonePe have also taken advantages of opportunities in local neighbourhoods as well as Tier 2 cities, by running pilots with kirana stores.
In December last year, financial behemoth Paytm said that it will invest 3,000 crore in the next three years to leverage kirana stores as banking points for depositing and withdrawing money from Paytm Payments Bank.
The seven million odd offline merchants are leveraged for hyperlocal banking services and will also sell financial products in the future.
Among other startups, Nearby Technologies faces competition from companies like FingPay. There is also Kaleidofin, started by ex-IFMR executives, which is looking to provide financial services to the last mile. However, its model doesn’t involve local kiranas, but is focussed at outreach through banking correspondent partners.