Madhuri- Welcome back to our channel ‘Fintech X’.The topic for today’s discussion will be
‘How to deal with the challenges of Fintech Startup?’ Being a founder of a company is not easy, and challenges are bound to arise. Today, we will be covering the growth story and the challenges that our guest faced as an entrepreneur and as a founder of a startup.

Madhuri- We are in conversation with Manish Kumar, the CEO and founder of KredX.

Madhuri- An IIT Kanpur alumnus, Manish has over a decade of experience in the banking and financial industry. Armed with deep insights into the financial landscape in India, he founded KredX – India’s leading invoice discounting marketplace, with Anurag Jain in 2015.

Madhuri- Through the KredX suite of products, Manish aims to provide integrated cash flow solutions for businesses by bridging the gap between payables and receivables. Since founding KredX, he has won the ‘Entrepreneur of The Year’ in Business Services – Money Services at the 7th Annual Entrepreneur India Awards 2017 award and Startup of the year 2018 in the Category “Discounting Platform”.

Madhuri- How did you come up with the idea of starting KredX? What were the pain points you wanted to cover and what was your inspiration behind starting a start-up?

Manish- I was working in HSBC in mergers and acquisitions. There wasn’t much work for me there, and I started to think about what to do next? The option was either to go back to banks or do something else. I decided it was the right time to start something of my own. The thought process at that time was to create something which could solve the problem of various companies without getting into the traditional methods of financial institutions. We wanted to come up with a way, where we wanted to help companies in raising working capital. We started doing our research and found out that there was an asset in every company’s book which can be sold, wherein the company could raise working capital from that asset. We wanted to bring some structure to this and organise it in a manner, which would prove beneficial to all.

Manish- If you know, In India there was an age-old instrument called Hundi, and most of the logistics and manufacturing department has been dependent on it. We too decided to do something on those lines but in a more structured and organised way with the use of technology. We did a lot of homework, sat with legal and compliance, did thorough research, and at the same time developed our products and launched KredX

Madhuri- What do you think is that driving factor for the growth of KredX that stood up above everything else?

Manish- I think a lot of this depends on the team, especially the initial team who believed in the idea of KredX. They all believed that what they are working on is going to become something big. The first 20 people all came with pay cuts, but they all come because the believed in the idea of KredX. When you start your business you will always have some doubt, but when people join you an the team starts getting bigger, your faith gets reaffirmed. Therefore building a first class team, which helps you in your ideas and growth is something that you should begin with. The second thing that comes is building trust among the clients. Most of the financial products are purchased on trust. Hence, the first year involved a lot of back and forth with clients and building their trust. We had to ensure that the customers get a seamless service, and their happiness was very important to build the company. This is one of the major reason that our company had a customer delight team within the first year of the company because we fundamentally wanted the customers to be delighted with our product and services.

Madhuri- The company has witnessed immense growth. If you could shed light on the major highlights of this journey?

Manish- Like any other company when we started, we thought our initial customer will be family and friends. But we were lucky that our first set of clients, be it investors or vendors were not family or friends. They did business with us because they believed in the company and wanted to be part of it. This was one of the major highlights for us as a company.

Manish- Another thing that was getting the trust of the people to invest money online on our platform. And as I said earlier, it is critical to building trust among the customers. Right now on the KredX platform, the deals are sold within minutes and it only because they have faith in the company. They are trusting that whatever is coming on the KredX platform is fundamentally better as compared to the rest of the market.

Manish- Our biggest milestone was launching our fully-fledged tech product in early 2016. Before that, the product existed after that we were giving a great experience to the customers. We renamed ourselves from Mandi to KredX. Then we went on to increase the limit of the company, and I remembered that we had a lot of discussions on whether we can do it. I put my foot down and asked the others to talk to the client about increasing the limit. And today, the limit has increased to ten times what it was then.

Manish- We also went on to open multiple offices in many cities like Mumbai, Chennai, Delhi, Kolkata, Indore, among others. We then went on to launch our second product, KredX Early where we broadened our horizons and extended our services to corporates. Now we are moving from just being an invoice discounting company to a company which provides complete cash flow solutions.

Manish- I believe we need to keep our eyes and ears open to get new ideas. Most of the ideas that have come to us are more like the combined thoughts of my clients. I keep my eyes and ears open and understand what my clients want. Client A would say something, client B would say another and then there would be client C who would have a different requirement. When you keep your eyes and ears open, you come across an idea which might be able to cater to the needs of all the three clients mentioned above.

Madhuri- Being the founder of a fintech startup, challenges are bound to arise. What are the major challenges you faced in this journey and what are the key takeaways?

Manish- I always feel that although media has pumped up the entire startup thing, I always believe that you need to have that itch to solve the problems. This is the same itch that kept you awake when you were in school and you got stuck on a mathematical problem and you have to solve this. If that itch is not there, you will not survive the journey. You need to have that passion. You cannot just say one day, I need to open a startup. Things don’t work that way. You need to identify a problem and then work on that. That problem should be something which stops you from sleeping at night, and only then can you find a solution to that problem.

Manish- There is no work-life balance, there is no sleep, there is no fame, no money, and the only thing that can help drive you is the passion to solve that problem day in and day out. There will be a lot of people who will come up to you and say that there is no solution to this problem, but that doesn’t matter. What matters is whether you can lose your sleep over it. You need to have that passion, that burning desire, muster all you have, and work hard day in and day out to achieve what you want. People have become big because they breathe in and breathe out the problem and try to find a solution to it, and not because you just want to run a startup. It is very tough, tiring, lonely, and time-consuming to start something of your own. There will be many times you would want to give up but it is important to rise above those situations.

Manish- There is always a weight on the shoulders because you have taken someone’s money and they have put their trust in you. One culture that is very important for start-ups is to be frugal.

Madhuri- A lot of rules and regulations were passed related to fintech, NBFCs, and Banks. What was your coping mechanism?

Manish- In fintech regulations are part and parcel of life, right, it keeps on coming up. You need to keep the regulator’s engaged, have to tell your side of the story, and you need to tell them what you’re working on. In the end, if your intent is right, you’re doing it in a compliant way, and you are working on something that solves a problem, I don’t think regulation could be a significant hindrance. And as I mentioned, if you tell them your side of the story and make them understand why you are doing something, the regulators will listen to you.

Manish- You need to change something or deviate slightly from the initial path. One has to be compliant with different things, and sometimes you have to push back and sometimes you have to find a new way. As I said, you need to be a problem solver be it related to any field. It is essential to play all the roles on the pitch be it a batsman, a bowler, or a fielder. It is also critical to identify the right time to offload your responsibility. The thing with startups is that the growth increases by 10X. It sort of goes from 0 to 10, 10 to 100, 100 to 1000, and this time is the most difficult. The founders need to let it go and have to trust people in taking responsibility on their behalf. At the same time, the founders have to move out from the day to day responsibility and think about how to expand the business further. It’s all part and parcel of a startup. It’s like, literally, it’s literally like a baby, right? Just like in the case of babies you will have to nurture it, teach them to walk, and one day you hand them over to teachers so they can learn more, similarly, startups require nurturing and then passing the responsibilities to more people for the startup to grow.

Madhuri- Everybody has a unique way of dealing with challenges. What is your secret ingredient to tackle such challenges?

Manish- I avoid doing anything that creates tension for me and would keep me up all night. I don’t do things which makes me question things about myself. Hence, the next day I wake up, I’m fresh, they will take up the next set of challenges.

Madhuri- What is your daily routine?

Manish- I wake up and head to the gym. After coming back, I play with my daughter and then go to the office. Office days are mostly the same. I go back home and then again play with my daughter. I think playing with my daughter is the biggest stress buster in my life and it keeps me grounded and acts as my coping mechanism.

Manish- If you feel that people can be frustrating, you really need to work with kids. They increase your patience as there are times when they will not want to hear, listen, or understand anything. So the two patients are very few may be very this market penetration. They take their sweet time to understand, they will ask for things which they can’t have, they won’t listen to whatever you’re saying.

Manish- And in a way, the same is for startups. Raising a child teaches you how to say no, and that is very important while running a startup. You know that the other person is going to be upset. But you have to take that decision because it’s good for the company.

Manish- You have to move on from your own individual. You have to be you logical and think from the company’s perspective. We have to yo keep in mind what’s good for the company and the people. Why I can relate to this more is because my company and my daughter both are three and a half years ago.

Madhuri- Did you have knowledge of some legal aspects?

Manish- Not always, but unfortunately, in our line of business, it did. it does. So when we started, we did a lot of check with the legal, the different kinds of lawyers, telling them that this is what we want to do. And most of the time, their first impression of us was that we could not help you with it. And you know, how can you do that? And I started taking it at face value sending it I mean if these guys are saying maybe it is, but somehow still not convinced and I started building it on my own. I had tons of legal books at my home. And I started going through them, and I started reading into things and had gone through tons of videos on a website and all the contract to financial services. And then I started asking relevant questions to ask when I say under which law under which act, they began to be pushed and started coming back saying that this guy looks well informed. And when they went back to the books and realised that what I’m saying is possibly correct and can happen. When I structured my idea differently, it more welcoming to them.

Madhuri- What are your future plans as an entrepreneur?

Manish- As such, I have no plans for myself. I enjoy doing this and wish to continue doing this. I firmly believe in one thing that if somebody is better than me in something, then that person should do it because then I will be an inefficiency in the system. As a company, we need to keep finding the bottlenecks, and eventually the bottleneck is wide enough for things to not cause trouble. We need to hire people and offload some responsibility to ensure that this bottleneck doesn’t come back. The idea is to keep on developing and making KredX big. Making it an effective cash flow solution company.

Madhuri- What has this journey taught you

Manish- I have become very patient after I started running my own startup. There was a time when I was very aggressive, but now I have become more calm. Both my daughter and the startup has increased my tolerance level. At the same time, I am still try to remain the same person and not change myself.

Madhuri- Do you think KredX works as a catalyst for other companies

Manish- Absolutely, KredX is a growth catalyst. Anybody who is not growing is not in a need of invoice discounting. If somebody is growing then they need to opt for invoice discounting services. We recently got a client who was growing at such a pace that the banks weren’t able to support the company. In fact, the bank had asked them to go to KredX, stating that the only company that can help you out in this matter is KredX. And that is why I say, if you are growing we are the best partner for you in the market.

Madhuri- What is that special advice you would like to give to the entrepreneurs who are building their companies?

Manish- Start a startup only if you are passionate to do it and not because you are planning it. Above all, it is important not to lose faith in the idea. Whatever you are working on, work because you have that passion and you believe in it, and not for the money or any other agenda. If you are planning to start a startup, don’t do it, if you have the passion to work relentlessly towards something, only then start your own business. There will be days when you will feel lonely at the top, but that will pass. Remember, a startup is no less than a child – you raise it, nurture it, build it, love it, and above all, believe in it.

Madhuri- It was a pleasure talking to you and thank you so much for all the insights. I am sure, all the young entrepreneurs out there will benefit immensely with this discussion. Thank you, Manish, for taking time out from your schedule for our podcast.

Madhuri- We will be back soon with another exciting topic. Thank you.

Madhuri- Let us now move onto what Manish has to share with us today.

How did you come up with the idea of starting KredX?
What do you think is that driving factor for the growth of KredX that stood up above everything else?
The company has witnessed immense growth. If you could shed light on the major highlights of this journey?
Being the founder of a fintech startup, challenges are bound to arise. What are the major challenges you faced in this journey and what are the key takeaways?
A lot of rules and regulations were passed related to fintech, NBFCs, and Banks. What was your coping mechanism?
Keeping the above in mind, did you reiterate the path you had defined for the company. How were these changes made?
Everybody has a unique way of dealing with challenges. What is your secret ingredient to tackle such challenges?
Being in the place you are right now, what are the few things you wished you were aware of before starting the company?
How would you describe your growth journey?
What are your future plans as an entrepreneur?
What is the biggest lesson you learned from this entire experience?
One thing you would like to say about the fintech industry and how it has inspired you?
What is that special advice you would like to give to the entrepreneurs who are building their companies?

Coming to the end of this podcast, if you could sum your entire journey in a single line. What will it be?