COVID-19 has been punishing for the Indian startup founders, but the bug of entrepreneurship is not so forgiving either. It is this itch which has forced Saurabh Soni to take the plunge giving up his position as a business head at Happy Loans, a Mumbai-based lending startup to start his own venture in the middle of a pandemic.
Soni has joined hands with Akhilesh Gandhi, a technology professional to start DigiSparsh, a lending startup concentrating on the healthcare space. While lending is a difficult business to be in and COVID-19 has hammered the sector bad, Soni believes healthcare fintech is attractive and is set to grow.
Health tech is growing leaps and bounds during the pandemic and going forward consumers will need financial support beyond simple mediclaims and health insurance covers. That is where DigiSparsh intends to build a full scale lending platform for the sector.
Citing a Redseer report, Soni said that the healthcare market in India is around $135 billion in size and out of this around $88 billion is in the private sector.
“Only $8 billion is insured, the remaining $80 billion market is where DigiSparsh will come to play,” he said.
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The idea is to replicate the consumer durables lending story in healthcare, something Bajaj Finance has already tried and so have few other new age startups, but Soni wants to do it in a wholesome manner and target the overall ecosystem as such.
Just to draw some comparison, Bajaj offers a Health EMI card which allows patients to access quality healthcare through zero cost EMIs at more than 5500 partner clinics across 1,000 cities. In its latest annual report Bajaj Finance said that in its lifestyle finance business the company has funded more than 5.4 lakh transactions, out of which more than a lakh were through the health care finance business.
So Soni already has some competition in this space. While he intends to start with invoice discounting for hospitals, only then will he foray into consumer lending or patient financing.
“The uniqueness of our product lies in going through the aggregator route and capturing the health data from hospitals which can be used for underwriting both hospitals and patients,” he said. But healthcare continues to be a difficult market to organise and digitise.
Industry experts have pointed out that healthcare as an industry is built on relationships between patients, doctors, suppliers and insurance companies.
To break into this nexus is not easy, but Soni is confident. Having scaled up businesses in the past, Soni believes he can replicate the success with DigiSparsh as well.
The company will start with two types of products, invoice discounting and consumer loans. Having partnered with aggregators which work in the health space, DigiSparsh gets access to rich transaction data of hospitals. They are building credit models around these hospitals and creating products accordingly.
“The biggest challenge for hospitals currently is the cashless insurance cases, it takes them 30 to 45 days to get those payments, we can discount these invoices, lend to hospitals to help them in their cash flows,” said Soni.
Eventually he wants to lend to the hospital’s supplier ecosystem as well.
Starting up in April 2020 bang in the middle of a raging pandemic, Soni said while it was tough, some factors did help their cause. As of now the company is bootstrapped, but Soni has started some discussions with investors to raise the first round by end of this year.
Being in the intersection of health and fintech, Soni believes that investor interest will continue to be there. Further being part of the finance ecosystem for a long time Soni has his contact book full. Before Happy Loans, Soni was the chief executive of Essel Finance and had spent a considerable time at Tata Teleservices before that.
“Also if you see within three months we have built our tech for the first product already, stitched partnerships with some players, which shows our execution capacity and that will be our differentiator,” said Gandhi who doubles up as the chief technology officer of the startup.
Further with Gandhi at his side, Soni believes the tech play will also be strong. A postgraduate in computer applications, Gandhi has spent a considerable amount of time in the Silicon Valley. He has served as the tech head at Shopkirana and was also the chief technology officer at IT solutions startup MoreYeahs before this.