EP 317 – Ritwik Ghosh and Sauvik Datta – SeedFlex – Bridging the Gap: Redefining Credit for Asia’s Micro Entrepreneurs

by | Mar 27, 2024

The Asia Tech Podcast was joined by the co-founders of ⁠SeedFlex⁠, ⁠Ritwik Ghosh⁠ and ⁠Sauvik Datta⁠. Ritwik Ghosh's extensive background in consumer and SME credit, first with Capital One Bank and then with Oliver Wyman, ingrained a deep understanding of credit systems in him, which he further enriched by spearheading Grab's fintech lending division. Sauvik Datta's career spans over two decades in financial services, marked by significant roles at McKinsey, American Express, and Standard Chartered Bank, before his entrepreneurial venture with Validus Capital. His specialization in risk management, credit scoring, and the application of machine learning models for customer underwriting has positioned him at the forefront of financial innovation.

Some of the topics that Ritwik and Sauvik covered:

  • Identifying and bridging the market gap with a mission-driven approach and addressing the underserved micro-entrepreneurs and SMEs in Southeast Asia
  • The power of data in unlocking financial services and enabling SeedFlex to extend credit to those deemed too risky by conventional standards
  • Embracing technological innovation for seamless financial solutions and effectively introducing a “pay as you sell” advance
  • The emphasis on ecosystem partnerships as a vehicle for scaling and building trust
  • The creation of tailored financial products that cater specifically to the unique needs of micro-entrepreneurs
Read the best-effort transcript

Read the best-effort transcript below (This technology is still not as good as they say it is…):

Michael Waitze 0:04
Hi, this is Michael Waitze. And welcome back to the Asia Tech Podcast. Today we are joined by Ritwik Ghosh and Sauvik Datta, the co founders of SeedFlex. Guys, thank you so much for coming back for taking the second shot technical difficulties from last time. And I really appreciate just having like right sense of humor and the right attitude to come back and do it again, that’s generally quite hard. Anyway, let’s give the listeners a little bit of both of your backgrounds or some context. And Ritwik, let’s start with you.

Ritwik Ghosh 0:30
Great to be back, Michael, again, hope the second time is a lucky charm. So quickly on my background, I started my career with Capital One Bank in the US and then I moved on to join a consulting company Oliver Wyman also in US, and both of them were in consumer credit SME credit space. So credit is by now in my DNA. And with Oliver Wyman, I moved from US to India for a short period where I helped them start their India consulting practice. That was my first day zero endeavor, and then we moved to Singapore about 12 years back. And as it happened, as I say Grab happened as Grab was one of my last clients with Oliver Wyman, and back then, Grab was in the initiation phase of setting up their financial services business. So I ended up first advising Grab on FinTech lending, how Grab should think about it, and I give them an piece of document which they took very seriously and in fact, set up the whole division, which is where in 2018 I ended up joining Grab to help build and scale their digital lending or FinTech lending business. I was with Grab until late last year, and that’s where I also met Sauvik, my co founder and that’s when again SeedFlex happened.

Michael Waitze 1:46
Okay, Sauvik, how about you?

Sauvik Datta 1:47
Thanks, Michael. Good to be back. Yeah, quickly get into my background been in financial services for 20 odd years started off with McKinsey in India move to American Express Standard Chartered Bank in Singapore, then did a day zero startup called Validus capital for three years 2018 is when Grab happened. And my experience has been broadly in risk management risk strategy, credit scoring machine learning models for customer underwriting. And during the last five years with Grab until mid of last year, or late last year, it was focusing on their FinTech lending businesses, risk management collections and risk strategies and credit operations.

Michael Waitze 2:26
Can I ask both you guys this? I mean, I want to get the SeedFlex in a bit, right. But I want to talk about this experience of Grab what was their idea? In other words, why did they want to build this business so badly? I can understand why they reached out to both of you just based on your experiences, like at scale, but why did they want to start this business? What was the impetus for them?

Ritwik Ghosh 2:43
Great question, Michael. And just for historical context, it wasn’t commonplace back in 2017, for platforms or ecosystems, to have lending businesses, in fact, very few had, yeah, but grab as a part of its mission has always been driven by creating impact for the underserved underbanked of Southeast Asia. And as a part of building the platform when they realize they have millions of drivers, working for Grab and millions of merchants working with Grab, and how difficult it is for those micro entrepreneurs to access basic financial services, you know, digital payments, digital lending, digital insurance, I think there was a clear understanding of a gap in the market. And that’s where the leaders at Grab back then. And give credit to them that back then figured out they must make an attempt to use their leverage as an ecosystem to plug that gap.

Michael Waitze 3:41
You use this term micro entrepreneur. And I don’t think that most people think about the drivers that work at Grab nor the the merchants that are on the platform as well as micro entrepreneurs. But can you dig a little bit deeper, there? both of you, either one of you just to explain why you think of them as micro entrepreneurs. And why Grab thinks them that way as well? Because I do think it’s really unique. Yeah,

Ritwik Ghosh 3:59
yeah, I mean, I can start and Sauvik please join in. Think about a driver for a moment, he essentially has an asset or access to an asset, which is a car Yep. And based on that he is living his daily income and expenses. And income net of expenses is what he takes home. Every day, he is in a business of variable income variable, partly fixed expenses, and end of the day, a variable amount of money that he can take home, and he’s living with that risk. And then on the same time, he’s thinking of how to get a better car, how to maybe have a second car, how to have a second business, the second side hustle. So it is what an entrepreneur feels like. And from our experience, at SeedFlex, that is how it everyday feels

Michael Waitze 4:42
like and in a way it’s weird. If you think about it even more, his family is almost like his investors because there’s a lot of cases these guys and gals that drive or even the merchants on the platform have kind of pooled money from their families and their neighbors and said, I’ll take care of us if you let me do this thing. Is that fair? Does that make sense?

Sauvik Datta 4:58
Yes, and they are 100 isn’t fair and either drivers or the merchants? Yeah, it is the time that they have. They’re trying to optimize to ultimately make a business out of it, right? It’s not a fixed payment type or salary today existence. It’s an existence based on how smartly you can sell your time per se, in driver as it is basically, how smartly and where they will look at themselves to get the best fare. For merchants generally Grab’s merchants at F&B it is how smartly you can manage inventories, how smartly you can manage the online platform and the demand coming out of online platform and the whole supply chain of it. So really think about it. They are individual New Age businesses, millions of them that are coming and growing. And eventually their objective is to grow the business as well as their family in terms of how they can elevate themselves in the socio-economic structure.

Michael Waitze 5:52
Can we talk a little bit about the culture at Grab, if you don’t mind that one of the things you both said right, was that they’ve always been committed to serving the underserved, right, both and creating impact? And it seems to me that to do that, particularly in in a business like Grab, I mean, in 2017, it wasn’t nearly as big as it is today, but still quite big. Yeah. What was it like from the cultural top down where you felt like what I believe in this mission? And I believe that the people that are telling me about this believe in it as well, how prevalent was it inside that culture?

Ritwik Ghosh 6:18
From my end, it was very unique, very refreshing and very authentic. Connecting with my background of 16 years in banking and financial services, everybody looks at financial services as a money making unit economics business, let’s commonplace the tech that Grab took on it or takes on it was yes, it is. But it has to be a double bottom line, triple bottom line business has to serve the community, it has to serve the beneficiaries. And of course, it has to create value for shareholders. No one No one denies that. And that was part of our day zero mandate. And so we tracked things like the overall income opportunity we created for micro businesses by giving them access to credit. did their GMV go up? They liked the product was NPS super high. And they talk about the product with other merchants, it wasn’t just about making money. Of course, any financial product to be sustainable has to be positive. But the true north was a combination of impact, sustainability, and economics. And that was just very clear and super refreshing. And it is true at all levels, not just at the level of leadership, but in our own business relationship, on the risk on the commercial side put together and every level of team we can breathe this mission and impact

Michael Waitze 7:39
maybe you can address this for me as well. None of these businesses get built overnight. And particularly because it’s a new business that requires a lot of testing a lot of data management, a lot of data analysis, maybe you can delve into how like this idea of taking a long term approach while still moving fast, was really important to you guys, when you’re trying to build and building this business at Grab Yeah?

Sauvik Datta 7:58
I tried to address the previous questionnaire with a different approach and then connect that back to this question. So if you really look at perfect what makes this business successful was starting with the target set of customers from a standard industry best practice perspective they are bank rejects if you go into this set of customers, even if you get a bank account open, if you’re lucky, you won’t get a credit line or a growth loan. Right?

Michael Waitze 8:23
Yeah, it wasn’t like they were comparison shopping between the banks products and some other product they couldn’t do the comparison shopping. Right? Great.

Sauvik Datta 8:29
Now the other extreme is they get credit products, but from a predatory lenders. Yeah. Banks to horrible, yes. Which is horrible. Now, when we set up this mission of solving this problem, we said that we have to do it by creating something that takes care of the risk, why they are considered as non bankable because general perception is the risky,

Michael Waitze 8:50
yeah, too risky as a broad brush, or can’t even figure out the risk, right, just as hard to measure correct.

Sauvik Datta 8:56
So we took the challenge of figuring out the risk and having enough risk mitigations so that we can still offer to this customer base and still can manage a sustainable portfolio. That was our greatest mission, I think. So when we set up the team top down, we said, Everybody works on one mission, how to make this sustainable without crossing the line and getting into predatory lending for that matter, and be ethical about it. Be transparent about it. And that was what we practiced was not something in a big bold vision statement or mission statement. It was actually not. It was actually what we were practicing there today.

Michael Waitze 9:27
But I mean, it’s weird to have to say it out, right? When you go to sleep at night, don’t you want to be able to feel comfortable that the value that you’re providing, like you said is sustainable and impactful. This is the triple bottom line you were talking about. And they were actually helping people out particularly for the unbanked or I’d like guys and gals with plenty of money can get credit wherever they want to and getting the credit or not getting it doesn’t change their lives. But the cohorts that you’re addressing, getting even just a little bit of credit can literally be the difference between sending their kids to college or just maintaining the level of poverty that’s not sustainable. No?

Sauvik Datta 9:58
absolutely…and day to day expand So suddenly, there were cases where in certain countries certain market, the price of oil went up overnight. Yeah. And these are micro entrepreneurs, again, to the point why we consider them as micro entrepreneurs, because ultimately their one of their inventory is for her.

Michael Waitze 10:13
Yeah, one of their input prices is oil. Right. And they can’t control it. So yeah.

Sauvik Datta 10:17
during that period of instability in the market price of oil, because the government in that market was still trying to figure out how to control the pricing, etc. A credit line helped them survive that period. Yeah. Just not only for the growth aspect, yes. That help it also for their how they run operations of their micro business to both aspects of the credit line health.

Michael Waitze 10:39
what was the source of information or source of data? And that may be the wrong framing of this question, actually, that actually allowed your team to understand what the risks were in a way that big banks couldn’t. Was it alternative data alternative measuring? Was it the cell phone like what were these things that allowed you to say we think we understand this, even though it hasn’t been addressed previously?

Sauvik Datta 10:58
I’ll approach that question in two parts. One is the pure data part. And the second is the strategy part. Right. Both are interlinked, and how these two interplay together to make this successful? I think so. So data part was the ecosystem data from an underwriting perspective, that gives us enough information in terms of the driving behavior of the driver, what how much money they earn, which days they earn, which days,they are fluctuating variability of that information, right, that has a hospital data. The second part is the strategy. So once we put into our mind that this is something we need to make it sustainable from Day Zero, suddenly the other extreme of growth for the sake of growing in a lending book, we have seen in multiple examples that went away.

Michael Waitze 11:39
It just didn’t make sense anymore, right? Yeah, correct.

Sauvik Datta 11:41
So you are growing, and you’re trying to create strategy where you are testing certain small segments, and then expanding fast, right, or testing, if it is not working, you’re bringing it down in terms of volume. So those micro strategies worked beautifully for us. And that actually helped us survive COVID. So during COVID, when the driving drop, we had ample amounts of playbook, you know, Arsenal to manage the portfolio.

Michael Waitze 12:03
At some level, this must have been a lot of fun for both of you as well, right? Because you have these theses, you also have all this experience and during your lives, you must have been thinking there’s got to be a better way to do this and better way to address these markets. But if you’re working at a traditional bank, or traditional lending institution, you can’t kind of test them out. And there are a bunch of different reasons why but not the least of which is that at the beginning, it’s just not going to move the needle for a multibillion dollar business to get another $1 million of revenue. But for a brand new business getting a million or $10 million of revenue. Again, it’s paradigm changing. And you can address things in a way that have never been addressed before. Because there’s no legacy around there saying this was the way we’ve always done it kind of thing. It must have been fun.

Ritwik Ghosh 12:40
No, it was a clean slate, with just a whole lot of opportunities and options that was given to us. And we are all forever thankful to have given that opportunity and freedom. Just one point I would connect with the last topic of discussion is I think conceptually, a lot of the credit industry treats credit as out of the door money problem. By that I mean that, oh, you need to know the borrower perfectly. You need to have great deal of information, and then only you should keep reading. But at least half of the challenge in this credit is about how do you get your money back right now. An ecosystem allowed us to lower the threshold of knowing the borrower because we had an ability to take the money back fractionally from their micro businesses, as cash flows came in fair enough, which in other way, make our job of having perfect information, which is what the traditional industry insists on wasn’t necessarily because we knew as long as they earn on the platform, they’re successful, the platform is successful, and they are successful. And we are successful as lenders, it’s a win win win. That was also part of the secret. Can

Michael Waitze 13:46
I ask you this, and I used to say this about AWS as an investment platform for startups. But you’ll see the equivalency here grab is watching what all these merchants do, watching how much the drivers drive, they can actually see them changing and growing over time. And if the platform is the business that’s allowing them to grow, is there a way to provide like reverse credit. In other words, go to a business or merchant and say your business, if you took a little bit of credit could grow twice as much, just be proactive about it, as opposed to waiting for them to come you because you have all the data and you can analyze it maybe better than they can if that makes sense. Because they don’t have all the resources that you do. Was that something that you thought about as well? Does that make sense?

Ritwik Ghosh 14:22
Absolutely. And that’s how we approached it. That’s cool. We got confidence with the product, we essentially approached the merchants and they didn’t believe it because credit is always like it’s

Michael Waitze 14:33
For them it was always scary, right? Like, oh, no, what am I going to do and their experience had always been predatory. Their cousins experience has always been predatory. They’re like yeah, I don’t believe you guys kind of feeling right.

Ritwik Ghosh 14:42
Right. So they didn’t believe us when we knocked on their doors and said, Hey, you are great. Here is credit that can help you grow faster and be greater and they’re like no one ever done this to us. Like am I supposed to not apply for credit and get rejected five times with good credit? And are you like some sort of fishy, and they heard that you are coming and knocking on my door and telling me, I’m creditworthy. It was just refreshingly different the power dynamics of that approach, they eventually believed us, and they benefited from us. And the experience was such that we didn’t have to market the product, they marketed it.

Michael Waitze 15:17
So you must have had a bunch of these aha moments, right. But one of them led to the founding of cede flex talk to me about what that is, with all the data and all of the connectivity and all the resources you have grab, it seems like why would you leave that to then go again and build something from scratch? What was the reason for that?

Ritwik Ghosh 15:33
maybe go back to some stories, and then going in with more of the analytical lens. But as we were going through COVID, we got a bit disconnected, sitting in our bedrooms and trying to do work,

Michael Waitze 15:45
I remember the feeling.

Ritwik Ghosh 15:47
Don’t want to remind you or anybody was supposed to COVID when we back to the markets, I remember this visit in Bangkok and talk about that much in Pune. And we were asking her about her experience and how she managed to survive. She runs a bakery run, which was an offline bakery. And she was in tears to explain that she only survived because she was able to go online almost immediately overnight, and sell her stuff. And that’s our business survive. And as a corollary to that, we were then proving her animals, similar businesses, I remember, the fish center and seafood reseller in KL, they all said that they really borrowed to COVID by being able to go online. However, what they found very challenging is how to get credit to support them when they made this pivot, or when their businesses took shape online, because all they had was trajectory of their sales grown maybe from the offline one, maybe in the online world. But no one was willing to give them access to capital based on what they had achieved, just based on their cash flow, yes, sales.

Michael Waitze 16:58
And in a way, this is kind of sad, right? Because what happened to them that’s like what happened pre grab, and then they get the benefit of being on the ground platform, somebody has all this data, then somebody can actually offer them credit. And then boom, one day, they wake up and everything’s gone again, and the right back into this vacuum of nobody understands my business. Nobody has any of this data, I’ll now I’m never gonna get credit again. And I could die kind of thing. Yeah. So they’re stuck. Now, once they’re off platform.

Ritwik Ghosh 17:00
Right. And that’s where we started realizing that, of course, as part of the platform, you can address part of this problem. Sure. But not everybody is on any single platform, not very long their sales are on any single platform. So the gap is just way bigger. I mean, online merchants going offline, offline merchants going online, you’re going from platform to platform, the it’s very fragmented. So for any single platform, however big and rightly incentivise they are, they wouldn’t be able to tackle this gap in a meaningful way beyond their own captive audience. And that’s where the idea of SeedFlex came to us.

Michael Waitze 17:57
So are you so sorry to interrupt you for a second? But are you suggesting then that businesses that these micro entrepreneurs were running were actually even bigger or potentially even bigger than they looked like when they weren’t grabbed? Which means that I think that they should have even more access to credit, right? Because all the grabs all was the stuff that was happening on the ground platform. And if they were literally selling offline or selling to another platform, but wasn’t being consolidated in where’s their businesses could have actually been bigger than they look to you there? No, was that the idea? That was the gap you’re trying to fill?

Ritwik Ghosh 18:26
Exactly. Michael, you just got to the point. In a typically statistically speaking, a platform captures 20% of their sales 35% Oh, wow. Okay. So there are four times five times of what a platform sees that is the actual size of the business got it. And then grab as a platform is focused on FnB, they’ve got their online sellers who are non f&b, their clothing, everything, clothing, fashion, goods, accessories, all kinds of stuff, electronics. So yeah, so we figured that there is the opportunity to serve that is 20 times 25 times what we could have served as part of any single platform. And that was the inspiration of seeing this build something that’s for the merchant first, which understands the merchant and can aggregate across different platforms. And ultimately, that’s the North Star for us.

Michael Waitze 19:14
So maybe you can address this for me was there particularly from the risk management standpoint? Was there some level of excitement around this idea or this revelation that wait a second, we thought, we’re seeing all this data. But as we just said, you’re really just seeing 25 or 20% of the data. If this could be five times bigger, we need to go do this on our own. Like there must have been some excitement around that. Yeah,

Sauvik Datta 19:33
Absolutely. When he saw the size now talking about the 20 to 25%. That’s at a meta level, you can’t really extrapolate when you’re actually underwriting one single merchant. We couldn’t have extrapolated and done that as part of grab. Then we said, okay, maybe the only solution for a merchant focus product. Again, the merchant comes at the top saying that I serve you with the right amount of credit that you deserve. Whether you take it or not depends on use. tuition, but I need to give you a credit line that takes care of your entire cash flow. Right? That’s when the excitement become 2x. Two 5x. Yeah, in addition to what we are doing it grab then we started digging in for almost one year saying that let’s dig out the what the data looks like before even we say that this is a problem to solve. How big is the problem if you see the product structure, this only works under the assumption that merchants are already cashless, they accept cashless payments, they sell cashless, hence accept from there and more customers cashless payments, and they get settled on their capitalist sales digitally, because there are two aspects. One is underwriting and on his collections, when you dig deeper, we found about 7 million merchants across Southeast Asia that are already cashless, are falling into this category. That’s a lot and of which only maybe a fraction of that gets some form of credit either through some of the ecosystems like grep. And again, it is concentrated within one particular industry because FnB three said yeah, this is something that we should do.

Michael Waitze 20:59
What does the platform look like to the merchants? So whether it’s the f&b people, or whether it’s the clothing or the luxury goods with or the accessories people, what does the platform look like to them? And is it something that serves the merchants on a day to day basis where they can see like a dashboard? And they can see information? Or is it just something that the lenders look at? On the flip side? Or is it does it go both ways? Does that question make sense? Who’s using it? And how are they using it?

Ritwik Ghosh 21:20
So the product and the platform is pay as you sell advance? So we figured because it’s merchant first, it’s very important for us to connect with the merchant on what are they going to get from this. So we calling it pay as you sell advance, what it is, is, as a micro merchant, you get an advance or a limit that is up to 12 weeks of your sales or historical sales that we get from our partnership with the black artist. And then they can draw down that limit with a single fee. There is no interest, no late fee, one time fee, and they pay us back from their future sales fractionally as a percentage of the future sales. And that could take anything between 12 to 24 weeks, depending on the quality of the version. So it’s a live product dynamic once the limit is there itself graduates, which is another thing that we tried to solve for here it is every underwriting we have looked at traditionally is a one time affair, you look at the history until today.

Michael Waitze 22:19
So that’s what’s gonna actually that’s part of the innovation here, right is that it’s like a real time platform. And as your sales increase or decrease the amount of credit that you get automatically increases and decreases as well, which is kind of cool, right? That dynamism that dynamic part of the platform is actually an innovation. And I kind of put it in my notes, right? It’s almost like because you’re focused on the merchants and not on the purchasers or the lenders, in a way it fits into this like BNPL category, but in reverse, if that makes sense. Right? Because you’re giving them credit before they make the sales because you’re projecting that those sales do they’re gonna get made as they have been made or more. Yeah?

Ritwik Ghosh 22:50
That’s right. It’s almost like and I think that in traditional sense is like an overdraft facility. Yep. Based on their historical sales and our confidence in their projected sales, the way they’d be back is similar to what would be a salary advance for salaried employee. I mean, what salary advance essentially I’m advancing you what’s yours. In this case, same, we are advancing the merchant, what is going to be the merchants future sales, as seamless

Michael Waitze 23:16
Yeah, I was gonna say that too, there have been a lot of businesses built and funded on this idea that you get paid at the end of the month, but you have expenses during the month, and we know what your salary is, right. And in this case, or in most cases, it’s fixed. So we know we can give you that money bit by bit, you can draw it down. And then at the end of the month, we’d look at what your salary is, we look at how much you’ve spent, and we kind of net it out in a way. Right. But now you’re doing the same thing for the merchants at some level. Yeah?

Sauvik Datta 23:38
Even we are making it even more seamless and easy. Go ahead, let net it out end of the month is happening every day. Yeah, as a fractional small amount, they are paying back the advance. So that’s why it is called Pay as you scale. So as you sell, you just pay it back.

Michael Waitze 23:53
So can I ask you this, though, because we talked earlier, right about when you were at grab used to go to the markets and say, you may not know this, and you don’t want to apply, but I’m just going to lend you some money. And they’re like, this feels really fishy to me kind of first result, first reaction, what is the reaction you’re getting now on the platform, right? Because it’s a much bigger idea. And it’s a different way of doing it, right? Because you’re not asking them to make a monthly payment. You’re not asking them to make a quarterly payment, you just got we’re gonna net this thing down every single day. What’s the reaction at first? And what is the reaction to them now that they see the benefit that credit can have for them over time?

Ritwik Ghosh 24:21
I think we are going through and we will go through a similar journey. Oh, this can be true. Oh, it is really true. How is it even true, right, that those kind of aha moments. I mean, it’s early days for us. So one of those efforts is first educate the partner. So we are working with other platforms, whether they are into online marketplaces, payment service providers on demand platforms. First job for us is to educate the partner because the partners reach out to these merchants on our behalf and that’s a difference from how we work with grab because it was embedded into grab and they will grab merchants now today we are going invite the partner because that credentialing is as builds trust. And that’s another big factor in finance, right trust, as a new entity, we need to build trust. So the partner helps us that. So first we educate the partner, then the partner communicates to the merchant, and we start directly interfacing with the merchant, and we have an opportunity to share what the product is with the merchant. Again, I think the important part is once they experience the seamlessness of the repayment, and they don’t get stressed about how to pay back my loans, I mean, our core belief is most of the people, most of these micro merchants, they are good people, they want to do good. They are doing good in their life. So it’s not like by intention, they don’t want to pay us that’s not true. That’s a minority of conditions. Yeah, those rich conditions, they all want to do the right thing. And sometimes their experience of having to do this has been so sketchy and bad, it has a lot of anxiety. They don’t want to take credit because they don’t know how it will pay back. Right. And that’s the problem we’re trying to solve. So we’re putting that whole payment upfront, saying, You don’t need to worry about paying us back, just do what you do where you sell cookies, sell more cookies, right? You know, sell fashion clothes, just be the best version of yourself, finance will take care of itself. Right?

Michael Waitze 26:16
And what was it like for you guys to build off this tech? There must be a pretty incredible tech stack that you’re building. Yeah?

Sauvik Datta 26:21
yeah. So since incorporation, it’s been eight months now. Okay, first one month along with our CTO, Shankar, he comes with about 20 years took a decade of experience in building tech stack, we spent about a month just architecting the back end, for sure. Given the newness of this product, we had to build everything. So we spent the first one month only on architecture, saying that this has to be an architecture that is modular, scalable, and stable as we grow. Why modular? Because if you think about this, the services that we are providing, right from CIT flexes perspective, is providing an origination service, which has a credit underwriting intelligence built into it. We’re providing a customer management service, and we are providing a collection service or a repayment service. Each of these components has newness into it. Yeah. So almost we had to build the whole tech stack on our own. Not almost we had to build the whole tech stack on our own starting from zero incredible journey, I must say. So both me rhetoric are fully involved in writing the product documents, weekly stand ups, making sure it’s running fortunate to have Shankar in our team Avinash, who comes with product experience from our background of lending and payments. And Joelle, who is our go to market leader as the initial part of the team. So there’s five of us, the initial team had a lot them pulling us, but yeah, eight months, of course, it goes without saying a lot of hard work. During that time.

Michael Waitze 27:41
I can’t wait to get some of the other members of the team on I’d love to have like a really deep tech discussion with the team. It’s just so interesting to see how this plays out. And yeah, you’re right, these partnerships are really important for generating this trust that’s necessary, right in both ways. And if they’re already interacting, this is what I found over time, right? If your micro entrepreneurs, and your merchants are already interacting with particular platforms, and almost by definition, they trust them. And if that platform then offers them something new, they’re not going to think, you know, again, it’s like going to a restaurant you love if they have a new dish, you’re just going to think this is also going to be delicious. And it’s the same thing for the platforms. Yeah, they’ll just think if they’re offering this new thing to me, it’s going to be just as good as the rest of the platform on which I’m operating. So I trusted by definition, so building those partnerships has to be really important to you guys as well, right?

Sauvik Datta 28:23
Our reach in merchant is through the partners and the partnership relationship very, very seriously. Yeah, actually create relationship rather than partnership. Yeah, go to the up to that level, saying that ultimately, this product is for your merchant, there are benefits, you’re gonna gain their benefits we’re gonna be and ultimately, it’s the benefit that merchant is going to gain is make the success or failure of the product.

Michael Waitze 28:43
Okay, this has been another really great conversation with you guys. But before I let you go, kind of right at the beginning of this conversation, we talked about how committed grab was to helping these micro and small merchants. And I feel like you’ve taken that with you. But maybe you can give a little bit of a vision for seed flex and how it fits into this mission to serve these micro and small merchants. And again, why just why it’s so important to both of you and your team.

Ritwik Ghosh 29:04
Credit is personal. And I’ll start with a personal story to afford so I grew up in India, and part of my education was funded with the studio. At that point in time, I thought it was privileged to get a student loan and my father happened to be in a bank. So I was like, oh how lucky I am to get a student loan, that I could go to the school or college that I wanted to. And my first job was in us as I said with Capital One and I realize it’s a different world. A student loan is embedded into your education you don’t have to go to five banks and feel privileged or beg for it it is structured and how huge a difference that credit makes. So credit done the right way is power to people. We have experienced this in both ways good and bad in our personal life and professional carriers. So nothing drives us more with grab and beyond grab than to make credit accessible in the right way and see these impacts right merchants thriving. Micro wins is becoming small drivers buying their car out buying a second car. This is big, very big.

Michael Waitze 30:06
Yeah, it’s kind of cool, like you said, to kind of move around the markets in which you operate and see the people that you’re helping actually thriving. That’s kind of cool. You like see flex did that or had the impact to do that kind of thing. And that makes you feel great at some level, right? So if you want to have anything before I let you guys go,

Sauvik Datta 30:21
Yeah, to me, it’s as personal as Ritwik mentioned. So my background, I graduated in statistics and mathematics. So my natural next step was to go for PhDs. Yeah, started applying in the US. I wasn’t fortunate to get student loans, my dad has to take the money out of his retirement funds. And eventually, I decided even after getting through a call from a good university, saying that I don’t have the financial means to actually go through the journey. Yeah, so that became personal. Having access to credit, whether I want it or not, should not be considered as privilege. It’s almost like a rite that having access to credit shouldn’t be unright that’s some level Yeah. Yeah. At some level and especially for if you’re deserving if haven’t fallen into those edge cases that we discussed before. Right? Yes, well, then I continued my journey, solving the problem with bigger corps than smaller startups then Grab and then hopefully we’ll be able to solve micro entrepreneurs, micro merchants, B to C merchants better with it. Plus, it’s actually how we talk to ourselves every day is Seed to grow and Flex to repay that’s the product that we want to build.

Michael Waitze 31:25
I love it. Okay, let’s end there. Ritwik Ghosh. Sauvik Datta, the co founders of SeedFlex. I feel like this was even better than the first time we did it. You guys are awesome. Thank you so much, again for doing this.


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