Fintech startup Rubique scales down operations amid NBFC liquidity drought

Financial products marketplace Rubique Technologies India Pvt. Ltd is scaling down operations and trimming workforce amid rising liquidity concerns affecting the overall non-banking lending sector, founder and chief executive Manav Jeet told TechCircle.

Mumbai-based Rubique Technologies (formerly known as Bestdealfinance.com Pvt. Ltd) is realigning service offerings to just three products -- personal loan, business loan and loan against property -- and taking other steps to achieve cost savings.

“We had to rationalise various cash outflow items like infrastructure, admin cost, business support cost and, thus, we decided to trim resources from support functions like tele-calling, technology, marketing and business support. We also decided to focus only on a few cities and suspended operations in certain locations,” Jeet said in an email response.

Rubique Technologies will now limit its operations to just three cities – Bengaluru, Mumbai and Delhi – from the seven markets it operated in earlier.

Jeet blamed the present situation on the ongoing liquidity crunch in the larger banking, financial services and insurance (BFSI) industry. Investors have been cautious about providing capital to lending startups in view of the liquidity crisis faced by non-banking financial companies (NBFCs) triggered by the debt defaults of Infrastructure Leasing & Financial Services (IL&FS).

Financial daily Mint stated that Rubique Technologies’ headcount had dropped to 47 now from 100 in November 2018 as employees chose to leave the firm due to long delays in salary payments.

“Rather than running behind business numbers, we shifted our focus to collections. Business team members who could not sustain the pressure of collections left. Also, unlike glorious stories created around startup passion, very few stand by in such turbulent times and the rest choose the route towards stability,” Jeet said.

Founded about four years ago by Jeet, Rubique Technologies enables small and medium enterprises (SMEs) and individuals to access loans and credit cards from third-party service providers through its platform. It charges a commission for each loan or credit card that it facilitates. In 2017-2018, loans accounted for Rs 12.42 crore of the company’s operating revenues while credit cards accounted for Rs 12.38 crore, up 35% and 111%, respectively, from the previous year.

The company grew its operating revenues 60% to Rs 25.2 crore for the financial year 2017-2018 from Rs 15.5 crore the previous year. However, losses increased 34% to Rs 23.18 crore for 2017-2018 from Rs 17.25 crore the previous year, according to filings with the corporate affairs ministry. Total expenses jumped 48% to Rs 48.4 crore from Rs 32.8 crore, chiefly on account of higher staff costs. The company allocated Rs 19 crore towards what it terms as a “business associate payout”.

Rubique Technologies claims to have facilitated SME and individual loans worth over Rs 3,522 crore and more than 150,000 credit cards since inception. The third-party lenders on its platform include banks such as HDFC Bank, ICICI Bank and Axis Bank and non-banking financial companies (NBFCs) such as Aditya Birla Housing Finance, PNB Housing Finance and Indiabulls Financial Services. Rubique Technologies claims to have on-boarded more than 100 financial institutions as partners.

“While the company is going through a little rough patch, we are definitely not shutting down and we still have the core team handling different functions and working on getting the firm on track soon,” Jeet said.

He also said the company is in talks to raise a strategic investment, which he hopes will fuel the firm’s survival and revival.

In April last year, the company raised an undisclosed amount in a funding round led by Japan's Recruit Group and Russian venture capital firm Emery Capital. Asset management firm Blacksoil and existing investor Kalaari Capital also participated in the round.

In June 2017, Rubique Technologies had raised $3 million (Rs 19.4 crore) in a bridge round from existing investor Kalaari Capital and Udayan Goyal, who is co-founder of Apis Partners.

In September 2015,  Rubique Technologies had secured $3 million in Series A funding led by Kalaari Capital. YourNest Angel Fund, Globevestor and Dexter Angel Circle had also put in money.