Gurjodhpal Singh, CEO, Tide India, is keen to make the domestic market contribute in a significant way to Tide UK’s financials. Tide is a financial technology services outfit, headquartered in the UK. India is its first overseas market, where it started its operations two years ago. With a customer reach of half a million so far, Tide wants to double its base by the end of 2025. In five years our aim is to build a large and strong business in India, says Singh, in this interview. Edited excerpts:
You're finishing two years in India. How satisfied are you with the progress and how soon should we expect the target of the next 500,000 customers to be met?
We are happy about the way the business has done within two years. It's at the upper end of our expectations. We moved forward in very measured ways - kept testing our product, market fit, prioritising things and so on. We remained agile. In the first year, we tick marked against our milestones which improved our confidence in our plans. We've got tick marks against all the things we wanted to do in the second year as well. In five years, our aim is to build a large, strong business out of India.
In terms of quality of customers, how has your experience been?
From an SME standpoint, we'll be at half a million soon. In the next one year, we will aim to double it to around a million. We keep adding more things onto the product, so the offering starts getting thicker and becoming relevant to a larger base. The product has completed two years in India as an organisation. We do three things in India: we started out to set up a product in a tech centre out of Hyderabad after Brexit. We launched the business in December 2022. The third thing we do out of India is, support operations for our UK business.
Everyone has a big plan to enter India. But somewhere it fizzles out, because it boils down to understanding the local market. How do you plan to address this?
Our strategy has always been to build a solid business which has solid unit economics. We went about serving customers and building a product which brought value to them. The unit economics worked in some shape and form. India is our second market, after the UK, though we continue to invest into newer markets. We are pretty normal and open to localise things. For instance, you cannot assume that India will have the same kind of credit card usage as compared to the west, because the card acceptance network is not there now. You cannot have a global business model and force fit on India. You have to be agile and nimble to the local nuances if a global brand has to work out in India.
How amenable are SMEs to adopting technology given that the banking sector remains a bit cautious on this segment?
They are very diligent with the money. Point of acceptance of using financial services digitally, this is present even beyond tier 2 & 3 cities. We saw a lot of traction in Tier 3,4,5 & 6 cities and towns. There is push from the ecosystem where it is no more possible for anybody to run business in cash. There is the need for formal credit. Third is with all the initiatives that the government is taking with GST. The way these frameworks have been built, it helps access formal credit in a nicer way. We are able to reach out or be available for these SMEs to be the first product which they have, and in some way and form.
Would it be fair to say that you are in a market which is not too overpopulated yet?
It's actually underserved. The financial services sector either goes about serving an individual or goes about serving an enterprise. Our target audience is someone who does not have a finance function - typically single owner, single person run businesses, a couple of family members helping out, just a couple of freelancers coming together, etc. This segment is underserved. What has helped us be successful is, we just focus on this segment.
Can you talk about the products which have helped you make that connection in India?
It's a broad overall package. We categorise all their payments in and payments out, create a broad, higher level profit and loss statement or a cash flow statement. Then, we help them collect payments digitally and raise digital invoices. With all this, we connect them to the right set of lenders. We have around 25 lenders now. For lenders, the funnel becomes very good, whoever comes through from us. The general challenge with people of companies working on this segment has been that if you do just a few pieces for the segment, the unit economics will not work.
Are you in the process of expanding your partnerships with banks?
We continuously try to look at what things we could bring to these partners from various banks. We are working with a bunch of people in the (insurance) ecosystem to create targeted products for this segment. The dynamics of underwriting insurance is different.
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