How a colleague’s job loss amid COVID-19 led this entrepreneur to found a startup focused on financial wellness
When the first wave of the COVID-19 pandemic hit, many people lost their jobs and sources of income to the nationwide lockdown. And one of Gaurav KumarHis ex-colleagues were also laid off, so that his wife had to cover all expenses on her own with her paycheck, which was insufficient to cover all essential expenses.
When the colleague asked for financial help, no one helped him. “When there was no other alternative, his wife turned to her employer to advance her salary, but was not approved in view of the economic situation. The sheer stress this family was facing made us think about a solution and then the idea for Valyu dawned on us, ”explains Gaurav.
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Along with Priyam Bhargava, Purna Chandra, Pramod Lamba and Anil Siwatch, Gaurav founded Valyu in Gurugram in June 2020. Rashoo Kame, who co-founded the company, is no longer part of the team.
It focuses on financial wellbeing for employees by offering a range of financial products and services.
Solutions for employers and employees
started developing and offering wage advance solutions that allow employees to withdraw their accrued salary (MTD) without waiting for payday. That amount is then settled through wage deduction, which is enabled by employers through a technology-powered platform that enables paperless, instant approvals and withdrawals in three minutes.
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The startup has partnered with banks and NBFCs to help fund various products, all of which are compliant with RBI regulations. In addition, Valyu.ai works with organizations that want to expand their financial support options for their employees. In short, the fintech startup focuses on delivering meaningful, simple and safe products to its end users.
Gaurav explains that they solve two key problems – for employees, the platform gives them access to a simple, straightforward and instant loan that will help them avoid financial stress. It also enables them to stay away from the traps of overpriced and compulsory unregulated lenders.
For employer, They enable them to put in place powerful employee performance policies without impacting their cash flows. Employees feel “cared for and valued” by their employers, which ensures better productivity and loyalty, and a happier and more loyal workforce.
How it works
After the idea came up, the team decided to do their own research. The data showed that nearly 50 percent of women and more than 65 percent of men were spending often extending their salaries in the middle of the month. This situation has worsened in the course of the pandemic.
“We carried out a few more surveys and interviews in all industries and cities to check the necessity, acceptance and relevance of our advance salary concepts. All of these surveys have confirmed the same thing – that it is urgently needed and that it actually relieves employees of their stress. We decided to move on with the idea and started building the ecosystem and a core team. By September 2020 we had grown to a team of 12 members, ”Gaurav told YourStory.
The approval process takes a minute with no paperwork and no CIBIL score is required.
Valyu.ai offers employees the opportunity to debit a percentage of their accrued income directly to their payroll if required. The corporations pay the amount paid to Valyu.ai and the employees receive the balanced salaries until the end of the month.
The team has a flat monthly fee based on the employee’s payroll. For the higher income bracket there is a 20 to 24 percent interest and 0.5 processing fee. Until now the company has disbursed near Rs 80 crore.
The model and the future
“The service will further reduce the financial burden on employees that may arise from an emergency or unplanned expenses. These advances are made to employees through secure channels by NBFCs working with their organization without the hassle of paperwork or delays. This in turn helps employees cushion a financial shock or unexpected expense with easy repayment options, ”says Gaurav.
There is currently no direct competition to Valyu, Pune Early salary also has corporate ties, and there are PayMe India also.
Gaurav says, “Our products are not B2C; we follow a B2B model. The employer plays an important role in relation to the user data that comes from the customer data systems. This reduces the fraud rate. The repayment comes from the employer, who in turn cuts it from the salary. ”
The The authorized share capital of Valyu.ai is Rs 35 lakh, and be The paid-in capital is Rs 3.5 lakh. It currently serves 10 lakh employees nationwide and expects to reach 25 Lakh employees in the next four to six months. Over the next five years the company will provides a payout of Rs 2,500 crore.
Kudos Finance and Investments and Arthmate (Mamta Projects) have joined the startup as a financing partner. The startup has also partnered with leading HR technology company PeopleStrong as a channel partner. While the team refused to share how much they charge, they said the fees are very low and are collected on a daily basis.
The startup is currently being booted.
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