Startup Saturday: Get KYC process done in a jiffy, with AadharAPI
Ritesh Kothari joined hands with Vijay Chhutani to build a platform for delivering accuracypune Updated: Mar 24, 2018 15:51 IST
Three and a half years back, when Ritesh Kothari wanted to get himself a mobile phone connection, he had to undergo quite an ordeal. “I had to submit all the documents and it took six days for the mobile company to get my SIM card activated. This set me thinking. Why should the Know Your Customer(KYC) process take so long?” And that six-day-wait sowed the seeds of AadhaarAPI.com.
“I thought about it. This problem is faced not only by mobile companies but also by banks, fintech companies, hotels, hospitals and insurance companies. These days, it has become mandatory for every single transaction. So imagine, how much time and effort is spent on doing customers’ KYC. A bank spends anywhere between Rs 500 to Rs 700 per KYC. “
The cost factor
With AadhaarAPI.com, this can be done in as little as Rs 5/-. Ritesh joined hands with his friend Vijay Chhutani, who has a degree in Electronics, to find a solution. “I studied the KYC issue, the problems of doing this, the regulatory issues and the Aadhaar ecosystem. We understood that instead of doing a KYC process with papers, it would be easier to do it digitally.”
“There are hurdles in doing the process digitally, too. Any company cannot get access to Aadhaar details. One needs the AUA license which costs Rs 1 crore, to do so. A small company cannot afford this. A big organization with a small requirement will not find it useful to pay this amount. For example, IBM wanted to do employee verification and spending Rs one crore, for this is not justified.”
The thoughtful tie-up
Says Ritesh, “One needs a technology infrastructure to access Aadhaar data. There are several SDKs (software development kits) that a company can use to access this data in a fast manner. Even so, it may take about three to four months to access the data. And here is where AadhaarAPI.com comes in. “With our SDKs one can access this data in just three days!” The duo tied up with a company in Delhi that has an AUA license and used it for the benefit of their customers.
Once the SDKs were developed and tested they had the job of finding customers. “We approached a small cooperative bank and told them about our product. We told them how they could integrate our system with their existing one, how it could provide greater user authenticity, reduce cost, paperwork, storage space and they came in. When they saw how our product saved time and money and was easy to use, they started recommending us to their peers.”
Initially the two had some tough time with funds. “I borrowed Rs 50,000/- from a friend and we managed to do all the work from our own funds. It costed us Rs three lakhs in 2015. AadhaarAPI.com needed more funds to grow. “Since we are incubated at Nasscom, we had an opportunity to meet up with some investors and funds. We put up our product and met Sanjay Mehta and Bindia Maheshwari of The CIO Angel Network. They declined initially. They felt that we had no traction in the market but I believe, a no is never a no. So I kept sending them updates regularly.”
Meanwhile the duo went about acquiring customers. In just four months, they had got 25 customers and 10 lakhs as revenue. Says Ritesh, “We had got the traction they needed. So when I informed them about it, they came back.” Ritesh sought help from Vipul Mehta of Tipping Point who helps start ups with due diligence and re presented their case before the CIO Angel Network. And they were in. “We got our first round of funding. We can’t disclose the amount. These funds are being used to add more customers and products.”
“We are now working on more products – like Aadhaar eSign, Fund transfer, Credit risk analysis, PAN verification and many more. These products too aim to join the dots and make it easy for people to get their credit scores verified. Currently if you go to a bank for a small loan the bank will have to access the data from CIBIL and it will take about five to six days to complete the process which involves verification from CIBIL, getting the Aadhaar digital signature, PAN. Anti Money Laundering details etc. With us, through a digital stack, it will be done in 10 minutes.”
Ritesh wants to build an ecosystem for all such verification platforms. “Five years from now we want to be a 100 crore company. At the moment, we are busy growing, developing new products and learning from their experiences,” says Ritesh, “ An initial no does not mean a no. It is important to run behind ideas and not problems. Solve pain and provide gain. And lastly, build your brand; get referrals from your customers.”