Bon Raises INR 7.8 Crore in a Seed Round Led by Omidyar Network(10:43 Hrs. IST)
PUNE, India, September 12, 2018 /PRNewswire/ --
Bon empowers self-employed and gig-economy workers in India with easier access to working capital
Bon, the FinTech platform that facilitates digital credit for flexible workers, today announced that it has raised INR 7.8 crore ($1.1 million) in a Seed Round led by Omidyar Network, the Silicon Valley-based impact investing firm established by Pierre Omidyar, the founder of eBay. Bon facilitates credit to the so-called 'gig-economy' workers, such as taxi and ride-share drivers, goods delivery, and other contractors in India, many of whom are first-time borrowers of formal credit. Other funders in this round include early-stage investment firm Axilor and Better Capital's AngelList India Syndicate.
"Access to working capital is a real pain point for the growing gig workforce - one that can literally make or break a business of one. In India, where credit cards are not pervasive, this issue is even more prominent, as people don't really have a safety net to rely on when they don't have cash on hand," said Bhasker "Bosky" Kode, founder and CEO of Bon. "Bon's mission is to empower these new flexible workers to thrive by providing them an easy money management tool coupled with a credit offering that allows them to keep their business moving no matter what."
With the increased penetration of smartphone, Internet access, and digital payments in India, the country has seen an explosion in the offering and usage of ride sharing, food delivery, and other hyperlocal digital services-creating job opportunities for a large pool of flexible workers. Tuned to the growing needs of this gig workforce, Bon launched last year with the goal of facilitating short-term credit to meet working capital needs for recurring expenses by these workers, who can now swipe the Bon card at hundreds of thousands of merchant locations around the country. Since then, Bon has issued over 5,000 cards - processed more than INR 6 crore in transactions and repayments, enabling its users to generate earnings of more than INR 10 crore. Bon has entered into partnerships with leading gig employers and marketplaces, such as Uber, and expanded operations to seven major cities.
"As the next half billion of Indians come online in the coming years, creating growth opportunities for digital businesses and flexible jobs, we expect a huge pool of gig workers to be left behind by traditional financial services providers," said Smita Aggarwal, Investments Director at Omidyar Network. "Bon is addressing the acute need of liquidity by this growing segment of people with an offering that has the flexibility of a credit card coupled with a convenient expense management tool app. By controlling the entire stack, from customer acquisition to repayment facilitation, Bon is helping gig workers to build resilience while nudging them to better financial behaviours."
Funds raised in this round will help the company further partnerships with banks, non-banking financial companies (NBFC), as well as increase its presence to 25 cities across India over the next 18 months and kick off operations in other markets in Asia.
How does it work:
Bon partners with gig marketplaces and employers to reach flexible workers and sign them up to its platform. The company uses smart algorithms to process multiple data points on each user and create its proprietary risk assessment, which is used to facilitate access to credit ranging from INR 500 to INR 10,000 via partnerships with financial institutions and NBFCs. Bon's proprietary credit scores are constantly updated, providing borrowers with dynamic credit limits. Repayments are set up to coincide with customer's cash-flow cycles, helping them keep liquidity and increase earnings reliably. Flexible employers and gig aggregators benefit from higher business uptake and simplified billing and payments processing.
To sign up for a Bon card, gig workers can download the Bon app on their iOS or Android device or visit one of their retail outlets. Bon offers more than 10 retail outlets in Pune, Bangalore, Gurugram, Noida, Kolkata, Ahmedabad, Guwahati, and Kochi. After providing necessary documents, a credit decision is made on the spot and a Bon card is issued with a pre-approved credit limit that can increase over time. Through the Bon app, users can see their credit limits, list of transactions, as well as make payments.
Self-employed, entrepreneurs and gig-economy workers lack access to financial services in form factors that salary employees usually get. Bon, a Pune-based FinTech firm, was created to bring financial services to the gig-economy workforce such as taxi drivers, delivery agents, independent contractors, and self-employed workers who are currently financially underserved in India. Bon was founded by Bhasker "Bosky" Kode, whose background in high-frequency online auctioning inspired him to turn every swipe into a lending opportunity by connecting institutional lenders with underserved workers. Bon is run by a young, small team that is growing fast across India. For more information, visit bon.pe/.
About Omidyar Network
Omidyar Network is a philanthropic investment firm dedicated to harnessing the power of markets to create opportunity for people to improve their lives. Established in 2004 by eBay founder Pierre Omidyar and his wife Pam, the organization invests in and helps scale innovative organizations to catalyze economic and social change. Omidyar Network has committed more than $1.3 billion to for-profit companies and nonprofit organizations that foster economic advancement and encourage individual participation across multiple initiatives, including Digital Identity, Education, Emerging Tech, Financial Inclusion, Governance & Citizen Engagement, and Property Rights. You can learn more here: www.omidyar.com/.
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