bon

Financial services company Bon has raised $1.08 Mn (around INR 8 Crores) from Silicon Valley venture capital firm Omidyar Network. This Pune-based fintech company for gig economy workers plans to utilize the funds to increase partnerships with financial institutions including banks and non-banking financial companies and scale up to 25 cities across India over the next year.

Bon was founded in 2016 by Bhasker Kode with a vision to provide working capital to self-employed and economy workers in India including taxi and cab drivers, goods delivery executives and other executives.

Gig workforce faces enormous problem accessing working capital. Credit cards and traditional loans are a hefty process to go through. While the government has introduced schemes like MUDRA, CGS and Stand Up India, the market is still young and vast. Gig economy workers don’t have a safety net to rely on when they don’t have hard cash with them.

Bon empowers these workers by providing them with an easy money management system that comes with a credit offering and enables them to keep their business running. The company claims to facilitate short-term credit as working capital for the recurring expenses of these workers. It has recently launched a card that can be swiped at merchant terminals at more than a thousand locations all over India.

Bhasker commits to the company and has issued more than 5,000 cards and processed around Rs 6 crores in transactions and repayments. The credit provided helped the workers earn more than Rs 10 crores. The company has partnered up with gig marketplaces like Uber thus expanding operations to multiple cities.

Smita Aggarwal, investments director at Omidyar Network, said, “Bon is addressing the acute need of liquidity by this growing segment of people with an offering that has the flexibility of a credit card coupled with a convenient expense management tool app. By controlling the entire stack, from customer acquisition to repayment facilitation, Bon is helping gig workers to build resilience while nudging them to better financial behaviours.”

Bon uses intelligent algorithms to process a number of data points on each worker and creates a proprietary risk assessment. After a user signs up on the platform, some details are captured and used to access the risk which is used to provide credit ranging from Rs 500 to Rs 10,000. Bon has partnerships with NBFCs to provide the cash.

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A gig worker can easily download the Bon app on their iOS or Android smartphone and sign up. The company’s proprietary credit scoring algorithm is updated regularly providing borrowers with the dynamic credit limit. Customers cash flow cycles are kept in mind before setting up a repayment plan to help them keep liquidity.

Bon currently operates at Pune, Bengaluru, Gurugram, Noida, Kolkata, Ahmedabad, Guwahati and Kochi but will soon expand to more cities within 18 months. After Gig workers uploads documents on the app, a credit decision is made instantly and users are issued with a pre-approved credit limit with a Bon card. The app can be used to see credit limits, list of transactions and make repayments.

We witness that India is one of the fastest growing digital economy in the world. With initiatives like Digital India and affordable internet by companies like Jio, the number of Internet users has increased to 462 million. The number is expected to grow to 800 million by 2020. The freelancing industry is growing at a fast pace and according to Intuit estimates, gig economy workers will represent 43% of the total workforce in India by 2020.

Players like LendingKart, Kissht, KreditBee, Slicepay, KrazyBee, ZestMoney already caters to a wide range of people including salaried professionals, startups and small businesses. Bon has revolutionized the market by tapping into the gig economy workforce. Fintech startups have already raised around $631 million across 70 deals in 2018.

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