Adhil Shetty, Chief Executive Officer of BankBazaar.com, told CNBC-TV18.com that the company is planning to raise funds later this year and it will be a growth round.

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“We are hoping that it will be a great strategic investor. What we are thinking is this is a 20-30 year business build out. It is not a 5-6 year thing. So we are in it for the long haul,” said Shetty, the CEO of the 13-year old loan aggregator-turned fintech startup, which is backed by WSV, Experian, Eight Roads, Sequoia India, Walden International and Amazon.

The last time, Shetty raised funds, was in 2020, when he raised $6 million from 8 investors, including Amazon and Walden SKT Venture Fund. The next round will be aimed at funding its co-branded credit cards, for which Bankbazaar has tied up with YES Bank and RBL Bank and is looking for other banks to partner with.

BankBazaar.com also has non co-branded business which involves another 10 banks like HSBC, Standard Chartered, HDFC and IndusInd Bank.

Just seven months ago, BankBazaar.com issued its first co-branded credit card FinBooster in partnership with YES Bank. The segment is already the company’s biggest revenue generator and it expects that it will make 80 percent of the topline in the financial year ending March 2023. Shetty aspires to have 3 million BankBazaar co-branded products in the market in the next 3 years.

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At the end of March 2022, BankBazaar had an annualised revenue run rate of Rs 156 crore, growing at 100 percent compounded annually. Shetty added that the earnings before interest, tax, depreciation and amortisation (EBITDA) exceed the cost.

Here’s how co-branded credit cards work

For BankBazaar.com, it started with providing a platform for people to check their credit score.

The model is simple. Bankbazaar.com has 50 million users, according to the company’s website. Of those, 18 million have signed up to check their credit score. With data at its disposal, the company is able to find and target the customers who are far from the banks’ radar and sell them credit cards.

The money goes from the bank’s pocket and if a credit card bill is unpaid, the risk remains with the bank. BankBazaar merely gets a cut out of the bank’s profit from the co-branded credit cards for helping it find the customer.

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The customers who buy co-branded credit cards from BankBazaar already have a credit history, and therefore, they aren’t first-time borrowers or people without access to banks or other kinds of formal lenders.

The risk is cut short by targeting customers with a minimum credit score of 700. According to Shetty, 150 million Indians, in a population of nearly 1.4 billion, make the cut.

For example, folks who can afford to buy appliances online. In May 2022, BankBazaar was running multiple ‘Buy Now Pay Later’ schemes on Amazon for air conditioners, because the demand for the product was huge. The offer could be different from one month to another.

In such a model, both the customer and the bank can gain, because at a 12 percent per year interest rate it is a very reasonable rate of interest but it also benefits the bank, because these customers tend to pay back even if the economy or the situation were to tighten, because they are of high credit, he explained.

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First Published:Jun 22, 2022 11:38 AM IST