[Turning Point] How SaaS startup Perfios went from managing personal finances to analyzing credit underwriting


Based in Bangalore Inasmuch asPerfiosInasmuch aswas founded in 2007 by former Aztecsoft executives, VR Govindarajan and Demean Chakroborty.

Perfioswhich provides a Software-as-a-Solution (SaaS) service to financial institutions for credit underwriting, raised $68 million earlier this month from returning investors Bessemer Venture Partners and Warburg Pincus as part of its current Series C round, according to documents it has filed with the Registrar of Companies (RoC).

On March 16 this year, Perfios announced that it had acquired Karza Technologies, a Mumbai-based SaaS platform for financial institutions, for nearly $78 million.

The startup is currently a product company focused on real-time credit decision and analytics. However, when the company started in 2007, this was not the problem statement it started with.

The beginning

Perfios started out as a personal finance management company.

In 2007, he started building a technology platform, which had the ability to acquire any type of data and then do the analysis. Its first product was also in the area of ​​personal finance.

“It aimed to help people manage all their finances, whether it was bank accounts, credit cards, loans, insurance or capital markets. It had the ability to suck that data from three ways and do the analysis,” Govindarajan said. Your story in an interaction.

In the case of businesses, this extended further to cash flow analysis and capital gains reporting, and automatic income tax reporting.

“But we had a challenge to monetize it. There weren’t too many people willing to pay for it,” says Govindarajan.

It was then that the company decided to pivot and approach businesses directly rather than consumers.

“We reversed the model, but we leveraged the same technology platform and instead of doing it as a B2C (business to consumer), we converted it to a B2B (business to business) model, making the same goes for digital lending systems,” he says.

Aware of the difficulties faced by different stakeholders such as banks and borrowers in the lending process, the founders of Perfios felt that the problem could be to make the lending process smooth and simple.

They did a proof of concept for 12-18 months, adding a layer of analysis specifically on top of the original product, after which they brought the product to market.

“But the technology platform is still the same. It acquires the data that it aggregates from different data sources. The difference is that in the case of loans, the analysis he does is more in line with what an underwriter or credit manager would be looking for,” he adds.

While personal finance management still exists and has 7,000 users, the underwriting and credit analysis platform is its core business.

The trip

“Initially, it was an upsell. It was a category creation and it wasn’t like it already existed,” says Govindarajan. “It took a lot of upfront evangelism efforts.”

“We couldn’t say that we have this platform that is faster, cheaper and better than the one you were using. We had to explain to them why they should get this platform,” he adds.

However, many things have worked in favor of Perfios, such as government and corporate digital transformation initiatives, especially the fintech ecosystem.

“There were a lot of fintechs being funded, and their main USP was digital. They were looking for a partner who could help them differentiate themselves from a typical banker or NBFC,” he says.

For many of these startups, Perfios has proven to be that partner. “Most of the biggest fintechs in today’s market have been working with us since day zero of their existence,” he adds.

In 2017, before raising its first round, Perfios had around 50-60 customers with the country’s largest financial institutions including NBFC, banks and fintechs as clients.

Perfios raised $6.1 million in 2017 in Series A from Bessemer Venture Partners to fuel its expansion. In 2019, it closed an additional $50 million in Series B led by a subsidiary of private equity funds managed by Warburg Pincus and Bessemer Venture Partners.

Today, Perfios has more than 300 customersincluding about 250 in India.

The company says it derives around 50% of its revenue from banks, 30% from NBFCs and 20% from fintechs.


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