Indian financial services web-site BankBazaar.com has raised $6 million in a series A funding round, from California headquartered VC firm Walden International. The website aggregates loan offerings from different banks and financial institutions.
Users can search and compare these loan quote offers to find the deal that suits them and apply online.The processing of the customer’s loan application also takes place online, including documentation, if the customer has a netbanking enabled bank account and PAN number. It currently supports 21 major banks countrywide. For other customers, Banks establish direct contact for the documentation.
BankBazaar.com intends to use the funding in expanding customer reach and increasing product portfolio to include more loan offerings, in addition to insurance policies and credit cards. It will also use it to grow its team and hire top talent from financial services and technology backgrounds.
The company was founded by Arjun Shetty, Rati Rajkumar and Adhil Shetty, who have previously worked with companies like Deloitte, Amazon and Kraft in the US. It has tie-ups with Axis Bank, ICICI, HDFC, Deutsche Bank, ING, Reliance Consumer Finance, Kotak Mahindra Bank, Fullerton India and Standard Chartered. It presently offers Home laons, Home loan Transfers, Personal loans and Car loans. It also has some loan calculating tools including an EMI calculator, Home Loan Refinance calculator, SIP Calculator, Retirement Savings calculator, among others.
Since, there is no usage fee for customers, BankBazaar.com monetizes through commission from Banks and FIs. According to Adhil Shetty, CEO of the company, for banks BankBazaar is 70% cheaper to sell compared to in-branch selling as human resource and paperwork is substituted with automated technology. This 70% cost in supply chain is shared between BankBazaar and the customer. The customer gets the benefit in form of reductions in processing fee, discounts on rates and bonus cash backs on referrals. Shetty says that the rate on loans is 0.5% cheaper compared to direct selling agents. The site offers Rs 2000 back as referral bonus to users on Personal loans and Rs 3000 on Car loans.
Other online financial services aggregation and comparison ventures include Info Edge owned PolicyBazaar,InsurancePandit (A&M Insurance brokers), ApnaInsurance.com (Apnapaisa-Sequoia Capital & JAFCO Asia), InsuranceMall.in, PolicyTiger.com, Getmeinsure.com (Peacock Financial Advisors), Fintact (Rediff backed), PaisaWaisa.com.
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