After spending nearly a decade working with the Indian market, Cheolwon (Charlie) Lee decided to enter the mobile applications business on the back of the smartphone wave. It took the former head of Real Networks’ Asia Pacific business around six months to set up Balance Hero in India, which runs the True Balance app.
Launched as a one-click platform to track the pre-paid balance on mobile phones in 2014, Seoul and Gurugram based True Balance now wants to become one of the major fintech players in the country with a bouquet of financial services including micro credits and insurance products. The company recently raised $23 million in a Series C funding round which will be used to grow its digital lending and ecommerce businesses.
The company changed its strategy about three years ago to enable its user base in rural markets to tap into an assisted recharge model through its online wallet. “From the day we launched our Android app, we have believed that balance checking is the gateway to balance recharge, recharge is the gateway to mobile payments, which in turn leads to mobile finance,” Charlie Lee, who shuttles between Seoul and Gurugram, said in a conversation with TechCircle.
The change in strategy, he added, helped the company fix the last mile.
Moving up the value chain
Close to 70% of True Balance’s user base is from rural markets, chiefly in the states of Punjab, Uttar Pradesh and Haryana. The app incentivises small kirana store owners and mobile repair store owners to use their wallet to recharge and pay bills for friends and family. These businesses earn a 10% cashback on recharges through their wallets.
The same store owners, Lee said, can push True Balance’s financial products to this captive base. “We are working with ecommerce platforms by providing EMI for users who want to buy products such as small appliances online. We are working with brands such as Xiaomi and a tech partner which facilitates merchant onboarding. We are also in discussion with some of the larger ecommerce players,” he said, adding that partnering with ecommerce entities was the result of strong user demand.
The company was also recently awarded an NBFC (non banking finance company) licence by the Reserve Bank of India and already has a pre-paid instrument (PPI) licence for its mobile wallet.
The mainstay of the company’s business is micro-loans for recharge and pay later options typically at less than Rs 500, apart from personal loans of up to Rs 5000 through partner NBFCs.
True Balance’s focus on growing its financial product portfolio has much to do with its line-up of strategic investors. The company’s backers include ICICI Bank, Shinhan Capital Co, which runs an eponymous bank, NH Investment and Securities and Japanese messenger app Line which announced fintech as its area of growth.
“Our strategic investors want to research the Indian fintech market as these are early days. They might be able to make a call in a year or two about the viability of different models,” said Lee.
SoftBank Ventures Korea, an investor in Delhi-based payments unicorn Paytm, is also an investor in the company. Lee is quick to point out that True Balance does not compete with the larger players, including Paytm, as its user base lives beyond Tier 1 cities.
The company claims to process close to 3 lakh transactions a day and has over 10 million downloads on the Google Play Store.