Personal Finance Startup , Perfios Raises Series A from Individual Investors [Interview]

Personal Finance startup, Perfios has raised Series A from individual investors and here is a QnA with the team on personal finance business, monetization plans and more.

The investors who have bet big on the Perfios proposition are all well known industry czars with a penchant for investing and entrepreneurship and include P.S Pai (Formerly of the Murugappa Group and Wipro), V.Chandrasekaran (formerly of Wipro, iGate and Aztecsoft), Dr. Ashish Gupta (Helion Venture Partners) and A.G Muralikrishnan (Ujwal Management Services) .

Qn: Personal Finance Market – Your competition is creating the market for you. But at the same time, cash is your #1 competition. How do you plan to penetrate the market?

Ans: You are right when you say cash being our biggest competitor as it becomes very difficult for any software to capture these transactions unless manually fed. To solve such difficulties we provide various options in which transactions can be captured along with auto fetch from financial institutions. For example – Mutual fund statements can be uploaded directly on to Perfios or it can even be emailed straight from the user’s personal Inbox! Along with this we also have also excel support for any past data upload, be it cash, Mutual Funds or equity transactions. Our idea is to give enough options to the users for any kind of activity, after all every user is not the same!

Qn: In general, the TAM [Total Addressable Mkt] for personal finance service over Internet is too small for India. DO you plan to reach out to other devices (like mobile) or grow the ARPU? Do share the details.

Ans – We do agree with your statement but with the entire personal finance market untapped it’s a good platform to start with. Having said that, we are also looking into expanding onto mobile platform. We already have a tie up with Samsung for their App store in India, would be looking into more such tie-ups. This clearly shows our intentions to grow beyond the traditional web and look at mobile as the additional growth engine!

Qn: Monetization plans – how do you plan to monetize the service?

Ans: Well, the service is free for end users and we have multiple  ways of generating revenue. A few of them are –

  • ‘MyClients’ (An application for Wealth Management firms, CA’s, Independent Financial Advisors etc) – we already have a few paying customers in this segment.
  • Freemium Model: we may take the route of a Freemium model where we may come out with more advanced features which would be paid (only for such advanced features and on a subscription basis). But be rest assured that the application as you see now would always be free. We may also come out with a few value added services where the end users will pay for utilizing those services. We are working on these models and will be deploying them soon.
  • Ad Model – Once the user traction picks up, we may also go with the traditional ad-model way (for free users)

Qn: What will you use the funding for?

Ans:  The money will be used primarily for marketing and team expansion.

Qn: Perfios is 2 years old and is probably the first co. to start in personal finance space. Tell us about the challenge you have faced in convincing people to use a service like this, especially the concern over sharing one’s bank details with a third party svc.

Ans– You are so very right, it actually took a lot of effort to make the concept popular in the market, evangelization was the primary activity in the initial days! We faced the biggest challenge in convincing users as to how secure Perfios is and how providing security and privacy to our users has always been our top most priority. For example – all we need to know from a user to get his/her account created is an email id. That’s all.

Over and above this, we do NOT even store any user credentials (Financial Institutions id and passwords) on our servers;. While evangelization and constant reinforcement of security/privacy practices help to some extent, there is so substitute to great execution (of those concepts) and delighted customers – that is the phase we are in now and hope to leverage the happy customers experiences to grow further

Qn. Series A from Individual Investors – defines convention. Why did you choose this route?

Ans: For our second round of funding we were discussing with a few VC firms and individual investors. While there was sufficient interest from the VC firms as well, we decided to move forward with the individual investors, as the existing angel investors wanted to participate in the new round as well and we did not really have room for the participation of a VC firm.