Spotlight. Building bank tech for India

We are a technology company currently working with financial services and [will work] in future with non-financial services customers. We build software for banks and lending partners across the product suite of lending, collections, and credit. Yubi largely has banking tech in terms of supply chain, partnering with banks for direct assignment software and co-lending. We are today the largest collections technology company. We are a TSP (technology service provider) for partners. If a partner wants us to onboard partner A, B, C, they use our protocol to come on to the platform. Anything we build is based on the protocol, network and software for a specific product.

The India market is not one where you can demand much pricing and other commercials. So anyone who’s not serious or bringing enough domain [expertise] to understand the problem areas we are solving cannot survive. We are largely focused on India... you don’t see too many players focusing on India because the competition here is intense. Many players exit within 12-18 months.

We see that in pockets. We saw a lot of players, from the largest in software technology to the fintechs, trying to build software on co-lending. Then we saw some of them exiting because they couldn’t sustain. Software requires a lot of domain [expertise] around financial services. Execution will be the biggest competitive moat.

We have had a great experience. Given the size of banks in India, we have benefited enormously because the product maturity progresses very fast. While we are a three-and-a-half-year-old company, our product maturity is already that of a 10-year-old, because they [banks] have enabled it. Banks will require you to make a certain amount of personalisation and customisation. Our biggest learning is that if you want to partner with banks, you cannot make your problem theirs.

Being in Chennai has helped find a great pool of talent from the tech and financial services domain. When you’re building software for financial services it is important to know that you’re working with customers who are regulated. Your allegiance is to the banks and you will do what the banks want.

Our gross margin is very high and will remain so. Our cost structures have remained the same and most of it is technology cost. Unlike any other company, we don’t have [a high] sales and marketing cost. You will always see us building more and more tech because our customers are large banks and enterprises.

We may be breaking even in FY25

No. We have some marquee investors. We would like to remain private for long. We will go public only when every parameter of the products we are building is completely non-volatile. We would not like to hold any uncertainty for retail investors.

In the short term, it might be more about the space you are in. But as you build more, it becomes about the scale, size and profit. As we enter our sixth year or so, our valuation will largely become a function of execution and what we have delivered financially. Because, when a late (stage) investor is coming in, they’re not going to reward your idea or vision. One thing I am seeing personally is that, as the ecosystem of start-ups is maturing, the focus has moved to founders who have executed at scale in their past avatar. Your past track record, governance, value system and compliance become important.