Investment amount shouldn't be constraint, when you make alternate investment
Indian retail investors traditionally don't have access to fixed income alternate investment products like high net worth individuals. Alternate investment platform, Jiraaf wants to democratise investment opportunities for retail investors through its technology-powered market place. It wants to enable individual investors to earn better returns by participating in high quality opportunities that go beyond equities, fixed deposits, real estate and gold. Given the unique positioning and market opportunities, the company has recently raised $7.5 million from clutch of investors led by Accel Partners. In a conversation with the Bizz Buzz, company's co-founder Vineet Agrawal said the platform already has more than 17,000 registered investors and it aims to increase it to one lakh by end of this fiscal year. Jiraaf has already completed transactions worth more than Rs320 crore in a short-span of time and eyes Rs1,000 crore by end of FY23. It also plans to increase its team size given the growth rate of the company
How did you get the idea of setting up Jiraaf that enables retail investors to participate in alternate investment products?
Prior to starting Jiraaf, I had worked in various positions in finance sector. I started my career in the corporate banking sector and was part of large corporate segment in Axis Bank. I also worked almost seven years in a private equity and NBFC set up in Piramal Fund. During that period, we did a lot of transactions which were good and I wanted to invest in those kinds of transactions. But the challenge in investing in those kinds of transactions was that you require Rs 1 crore or Rs 2 crore to start with. Not many people can invest that kind of money.
I always thought that investment amount shouldn't be a constraint for participating in great transactions. After leaving Piramal Fund, we started a consulting firm. During that period, we were raising a lot of capital through many interesting transactions. We felt that there was a need of a platform which would make the entire process easy with participation of people seamless. That was the simple idea with which we started our journey. When we started earning after college, most of us will invest in shares, real estate and gold.
But when you see the portfolio of ultra HNIs (high net worth individuals), family offices, and others; they don't invest like us. Rather, their portfolio is skewed towards alternate investments. When we started, we identified five products such as corporate debt, invoice discounting, asset leasing, and revenue-based financing. So, through our platform, we are providing access, capability, information for investors to invest in alternate investment products.
How do you create the market place of getting the information about these alternate investment products and making it available for investors to invest? Can you throw some light into this aspect?
There are three engines in our platform. First is the supply side that curates the investment opportunities, second is the technology engine and third is the demand engine wherein the investors come and invest. Supply side is headed by Vikas Bansal, who is an IIM Lucknow grad, and has 15 years of experience and was heading the Kotak Mahindra Bank's north India division for banking, financial and distribution for the entire north India. He has deep expertise in alternate investment products including corporate debt, invoice discounting and debt to NBFCs among others.
Our venture debt and revenue-based financing segments are headed by Prateek Goyal, who is an IIM, Ahmedabad alumni. For five years, he worked in Hong Kong in private equity sector. During his stint with private equity fund, he had analysed and taken investment decision in 30-40 companies. He had also done equity deal for Rent Alpha when he was part of Bravia Capital. I & Saurav Ghosh (another co-founder) are also from finance background. Our investment picks are done after thorough due diligence.
We have EY, which does the financial due diligence and legal due diligence is done through J Sagar Associates. So, we don't compromise on due diligence on any level. Once that is done, it goes to the risk team, which is headed by Ankit Bhartia. Once risk approves the deal, it goes to our investment committee. After the investment committee's approval, that is listed on the platform. So, the process is very stringent and strong.
How was the response so far from investors and corporates? What is the kind of transaction your platform has seen in this short span of time?
We started operations in September 2021. In this short span of nine months, we have seen Rs320 crore plus worth of transaction in our platform. We are aiming to end this financial year with Rs1,000 crore worth of transactions.
Currently, we have around 17,000 investors registered with us. We are aiming for 1 lakh registered investors by end of this fiscal year. We are witnessing 55 per cent repeat investors. Till date, we have not faced a single delay or default in our platform.
Jiraaf raised $7.5 million from investors led by Accel Partners. What are your expansion plans after Accel investing in Jiraaf?
We couldn't ask for any other better name to join us at this juncture of our journey. It helps us in many ways. First of all, it gives credibility to our platform. It brings confidence of people that a marquee investor like Accel being on board shows that the company follows all top-of-the-line system and processes. Secondly, it helps us in deal origination.
Accel has invested in more than 100 companies in India and now, all those 100 companies will be accessible to us for structuring the deals. It gives a lot of boosts from business perspective. From expansion perspective, we are lucky that we are a 50 plus member team. We may grow to 75-member team in next couple of months. This will help us to take our company to the next level. Once we reach that point, we will think our expansion in geography perspective.