Best Place To BuildJEE Prep LIED to You: Here's Why You Need To BUILD a Career After JEE | Propelld CEO on BP2B S2 Ep.5
EVERY SPOKEN WORD
60 min read · 11,695 words- 0:00 – 0:47
Intro
- SPSpeaker
did you not at some point think, "Maybe startup life is not for me, let me go get a job?"
- VSVictor Senapaty
BYJU'S success or failure defined the entire ecosystem, which risk is a good risk and which risk is a bad risk, and there is a way of doing it, and so you guys should also be open about that. That's when that money flows in.
- SPSpeaker
The mistakes we regret are less of commission and more of omission, things we didn't do-
- VSVictor Senapaty
Yeah
- SPSpeaker
... rather than-
- VSVictor Senapaty
Yes
- SPSpeaker
... the things we did.
- VSVictor Senapaty
Look, education is an investment. Uh, people plan for education. It's not a very individual investment, it's a family investment. Your traditional banks, uh, and NBFCs typically look at education not so different from how they would look at a personal loan. In my head, you know, there's a back gate, and there's a sand beach starting-
- SPSpeaker
From the back gate [laughing]
- VSVictor Senapaty
... from the back gate. [laughing]
- SPSpeaker
Hi, this
- 0:47 – 1:43
Welcome to the Best Place to Build
- SPSpeaker
is Amrit. We are at IIT Madras, my alma mater, and India's top university for people who like to build. We are here to meet some builders, ask them: What are you building? What does it take to build? And what makes IIT Madras the best place to build? [upbeat music] Hello, and welcome to the Best Place to Build Podcast. Today, we are sitting with Victor. Victor is the CEO and Co-Founder of Propelld. Uh, it's a Series C company in education financing. He's also a student here from 2007 to '11. Hi, Victor.
- VSVictor Senapaty
Hi, Amrit. Thanks for having me here.
- SPSpeaker
Victor, let's start with the most obvious question. You represent a company called Propelld.
- VSVictor Senapaty
Yeah.
- SPSpeaker
So can you start with what Propelld does?
- VSVictor Senapaty
So, um, Propelld does,
- 1:43 – 3:10
What Does Propelld Do?
- VSVictor Senapaty
uh, education financing. Uh, so we give out loans to students who are in need for, uh, education loans. So they want to pursue educational courses, and they are in need of funds, that's where we come in. Uh, we are an NBFC. We've been there since the last seven years now. Uh, we are close to a 1200 crores AUM right now. Uh, we give out loans, uh, up to at least, uh, 2.5 lakh students every year. Uh, I think we would be at par or probably higher than an SBI in terms of the number of students that we give out loans to. We have had, uh, you know, performance where our, uh, NPAs, uh, which is seen as a gold standard, uh, you know, in the NBFC industry, we have our NPAs close to around a 1% level, and we are near, near profitable, so...
- SPSpeaker
Wait, wait, wait, I want to just ask you a little bit about that. NPA is non-performing asset, right?
- VSVictor Senapaty
Correct.
- SPSpeaker
From a very layman perspective, NPA is when a person who has taken a loan is not returning the loan.
- VSVictor Senapaty
Correct.
- SPSpeaker
Right?
- VSVictor Senapaty
You're absolutely right. As in if there are 100 people who have taken loans, how much of your money is coming back? How much of your money is lost? Uh, the money lost is basically your NPAs.
- SPSpeaker
And you're saying that, uh, Propelld is at 1%, which is a gold standard.
- VSVictor Senapaty
Correct.
- SPSpeaker
How much will be the industry average?
- VSVictor Senapaty
Probably around 10%.
- SPSpeaker
What? It's a- you're saying it's from 10% to 1% for you.
- VSVictor Senapaty
Yes.
- SPSpeaker
Um-
- VSVictor Senapaty
Yeah
- SPSpeaker
... I want to ask you also, education financing is a pretty old business, so y- you are into this, um, older business. You are sort of achieving something that's 10X
- 3:10 – 9:05
How Did Propelld Change Education Financing in India
- SPSpeaker
better than-
- VSVictor Senapaty
Yeah
- SPSpeaker
... um, the industry average. What is the, what is it, what is it that you guys have invented or figured out that is helping you do this?
- VSVictor Senapaty
When we went in, in education financing, we had a certain, uh, conviction, uh, and a thesis in mind. Our thesis was that, um, look, education is an investment. Uh, people plan for education, and especially in, in India, families plan for education. Uh, it's not a very individual investment, it's a family investment. Uh, and the output is also very family-centric. The ROI is accrued to the family, it's not to the individual person per se. Um, so what we realized is that, um, your traditional banks, uh, and NBFCs typically look at education, uh, not so different from how they would look at a personal loan. Uh, which is to say that you just look at the individual's current capabilities, and you underwrite that individual's capability of, um, servicing the loan, uh, servicing the cash flows of the EMI that is going to come, come by.
- SPSpeaker
Fair enough. Let me tell you what I remember-
- VSVictor Senapaty
Sure
- SPSpeaker
... from whatever I have learned. Uh, correct me if I'm wrong.
- VSVictor Senapaty
Yeah, yeah, please.
- SPSpeaker
If I'm giving a loan to someone, then I want to check for his capability to return it-
- VSVictor Senapaty
Correct
- SPSpeaker
... and his intent to return it.
- VSVictor Senapaty
Correct.
- SPSpeaker
And so I'll use proxies like, does he have enough salary? Does he have enough assets-
- VSVictor Senapaty
Yeah
- SPSpeaker
... uh, to be able to afford it? And has he given loans, has he, has he repaid loans in earlier-
- VSVictor Senapaty
Correct
- SPSpeaker
... as a proxy for intent?
- VSVictor Senapaty
Correct. Correct.
- SPSpeaker
Okay.
- VSVictor Senapaty
Yeah. So where we differ is in a couple of things. One is, um, we feel that, um, both in terms of intent and ability, there's a big difference when you're taking a personal loan, which is a, uh, you know, expense that you're going to make, versus when you're going for an education loan, which is an investment that you're making. Already the intent is very high for somebody who is doing an educational- which, who is pursuing an educational course. Depending on what the student's, uh, you know, history, academic history has been and where they're going to, there you can sort of take a guess at their intent as well.
- SPSpeaker
Sure.
- VSVictor Senapaty
Uh, so for example, a student who has, let's say, a 80%-plus career or an 85%-plus career, going into a, let's say, a Tier 2 private college, like a lovely professional university, uh, you know, his career is wide open in front of him once he goes there. The intent is going to be really high to complete that course.
- SPSpeaker
Mm.
- VSVictor Senapaty
And then, of course, that ability also comes in because, you know, because it's an investment, and once you do that course, uh, you are supposed to get some income, and that income is supposed to grow over time as well. So-... that's the difference. That's how we look at it.
- SPSpeaker
That's very interesting. You are saying that the intent and ability markers comes from, um, if he has performed consistently academically, that's like, ah, an intent to do well in life?
- VSVictor Senapaty
Correct.
- SPSpeaker
And, uh, if he's, uh, gotten a good course, then he will obviously get a better salary or get a good job-
- VSVictor Senapaty
Correct.
- SPSpeaker
-and therefore, the ability will anyway follow.
- VSVictor Senapaty
Correct. So all of those factors play in, the student's academics, the quality of the institute or the quality of the course that he's taking-
- 9:05 – 15:22
Victor’s Entrepreneurship Journey
- SPSpeaker
when you started your entrepreneurship journey?
- VSVictor Senapaty
Uh, my first idea was, uh, something extremely different. Uh, so, you know, uh, the first idea that we had was, uh, uh, you know, uh, I had a company which was, uh, into teaching astronomy to kids. Uh, so we'd built a-
- SPSpeaker
Okay
- VSVictor Senapaty
... we'd built a portable planetarium. Um, that was with a senior of mine from IIT Madras as well, and we used to take it to schools, carry that to schools, set it up, have like a camp, astronomy camp over a week, get students in, and sort of, uh, show them, uh, astronomy shows and teach them about shows. Uh-
- SPSpeaker
When was this?
- VSVictor Senapaty
This was, uh, way back in, um, I think, uh, '13 to, sorry, '14 to '15.
- SPSpeaker
And where was this?
- VSVictor Senapaty
This was in, um, you know, partly in Bangalore and partly in Mumbai.
- SPSpeaker
Okay.
- VSVictor Senapaty
Yeah.
- SPSpeaker
So you had a astronomy kit, and you were taking it to schools?
- VSVictor Senapaty
Yes.
- SPSpeaker
Okay, so then, uh, this is- I'm very curious, how did you move from there?
- VSVictor Senapaty
How did I move from there into the NBFC? That didn't happen in a straight line as well.
- SPSpeaker
Okay.
- VSVictor Senapaty
Um, so the, uh, uh, you know, uh, Propelld is the fourth startup that I'm doing, actually.
- SPSpeaker
Okay.
- VSVictor Senapaty
Yeah.
- SPSpeaker
You have my attention. Let's go through each one. So one is astronomy.
- VSVictor Senapaty
Yeah.
- SPSpeaker
Did it have a name?
- VSVictor Senapaty
Yeah, Astroworks.
- SPSpeaker
Okay, Astroworks. And then?
- VSVictor Senapaty
Then, um, I started, um, we started, uh, hyperlocal grocery delivery-
- SPSpeaker
Okay
- VSVictor Senapaty
... when there was Coolie.
- SPSpeaker
And this was which year?
- VSVictor Senapaty
This was, uh, from probably around '15 to '16, probably a year.
- SPSpeaker
Okay. But hyperlocal grocery delivery, uh, even companies like Swiggy entered it much later, right?
- VSVictor Senapaty
No, but if you remember, there used to be an earlier avatar of that, which used to be the avatar of Grofers for Blinkit.
- 15:22 – 20:44
The Origin Story of Propelld
- SPSpeaker
of Propelld?
- VSVictor Senapaty
Actually, I didn't. It was Bibhu's idea.
- SPSpeaker
Okay.
- VSVictor Senapaty
And, um, you know, uh, that's when me and Brijesh were doing Pristine Cut. Uh, but we thought this idea is way bigger and actually has a lot of, uh, you know, a lot of impact, and we could really build a large company and also help out students here, and that's when we decided, you know, let's do it together, and we decided to close down, uh-
- SPSpeaker
Mm
- VSVictor Senapaty
... Pristine Cut and do this full-time together. Uh, so that was-
- SPSpeaker
I-
- VSVictor Senapaty
... again, a choice.
- SPSpeaker
I remember talking to you earlier and you were talking about how in education, what's happened also-
- VSVictor Senapaty
Yeah
- SPSpeaker
... uh, in parallel, n- nothing related to your company, but that the cost of education has been sort of going up. And, uh, what happens is, I mean, it's going up to account for better teachers, better facilities, and so on. Uh, but what happens is that it starts excluding some people, right?
- VSVictor Senapaty
Of course.
- SPSpeaker
And the affordability of education keeps going down. So in a sense, um, is that something that you guys are thinking about?
- VSVictor Senapaty
We were. Um, you know, of course, uh, that's how we were thinking about it. Um, so, you know, let me go back to the very start of the idea, right? As in... So I- you know, we have a very strong belief, uh, that education, ideally, in an ideal world, should, should be a social expense. Uh, you know, so that's how Milton Friedman thought about education, so that's how we got inspired as well, because it's not just for the individual. Uh, as in, if you really think about it, once as- once somebody gets educated, the value comes in to not just him, but the family, to the neighborhood. A lot of neighbor kids also get, uh, you know, sort of inspired. To everybody, and the society as a whole, he's a better citizen, right?
- SPSpeaker
Yeah.
- VSVictor Senapaty
And, you know, uh, he can contribute more. So it should be a social expense, but that's not how it works. Um, and we've all seen how education has become out of reach, uh, in countries like the US.
- SPSpeaker
Yeah.
- VSVictor Senapaty
Uh, you know, of course, the quality of education is a lot higher, but if you start looking at the education, uh, the tuition fees versus the sort of ROIs-
- SPSpeaker
Correct
- VSVictor Senapaty
... uh, they're very separated now.
- SPSpeaker
Yeah.
- VSVictor Senapaty
And it's increased like crazy, uh, in the last few years.
- SPSpeaker
Yeah, even for top jobs, like if you are a, if you are studying for medicine-
- VSVictor Senapaty
Yes
- SPSpeaker
... in the US, and then even if you're working-
- VSVictor Senapaty
Yes
- SPSpeaker
... and you have a successful practice or you're working in a big hospital, it's like a 10, 15-year journey to pay back your debt.
- VSVictor Senapaty
Exactly, right? And-
- SPSpeaker
For, like, a top job.
- VSVictor Senapaty
Exactly.
- 20:44 – 23:52
How Did Victor End Up At IIT Madras
- SPSpeaker
uh, your, your school-
- VSVictor Senapaty
Yeah
- SPSpeaker
... and how you got to IIT, and let's trace that journey a little bit.
- VSVictor Senapaty
Sure. Um, no, so it's been a typical journey, and I think most IITians, uh, you know, would have that journey as well. You grow up in a Tier 2 city, everything that you hear from parents, uh, you know, and you see, uh, from parents is that, you know, IIT is a gold standard. That's where you have to be. Uh, you see a few guys, um, you know, who are seen as some rock stars, uh, some seniors who've gotten into IITs. There'll be very few, but they're seen like rock stars or gods, uh, and you aspire to just be that. You know, everything that's- that you do is like, you have to do whatever you need to do to just crack that exam and get to that place. So yeah, that's how the journey has been.
- SPSpeaker
And then when you came- when you got into IIT, uh, how, how come you landed up in Ch- uh, in Chennai? Because, uh, from Bhubaneswar, you would... And also the same question for your co-founder, who was also from here.
- VSVictor Senapaty
Yeah.
- SPSpeaker
Um, how come you landed up in Chennai and not, say, in Kharagpur, which is obviously closer to Bhubaneswar, or in, uh, Delhi or Bombay?
- VSVictor Senapaty
So interestingly, um, I went to Kharagpur, uh, for my, uh, what do you call that?
- SPSpeaker
Counseling.
- VSVictor Senapaty
Counseling.
- SPSpeaker
Yeah.
- VSVictor Senapaty
It used to be a physical counseling-
- SPSpeaker
Yeah
- VSVictor Senapaty
... at that point of time. I realized that, um, you know, it's in, uh, you know, there are just fields surrounding it, uh, and there's just a campus. So I was like, "Oh, should I come here?"
- SPSpeaker
Mm.
- VSVictor Senapaty
So I had always had that question: "Should I come here?" Then, um, what happened, funnily, is that, uh, I met a senior of mine, uh, you know, uh, one-year senior. He was already here. I got connected through a common friend. Um, and I asked him how Madras is, uh, as a campus: "Is it fun?" Uh, he, he sold Madras to me. [chuckles] He made it sound to me like, uh, "Hey, all you have to do is, uh, whenever you get bored, all you have to do is, uh, you know, uh, take a bag, uh, with spare clothes. In five minutes, you'll reach the beach. You can have a lot of fun in the beach."
- SPSpeaker
[chuckles]
- VSVictor Senapaty
Like, in my head, I always pictured it as, uh, you know, there's a back gate, and there's a sand beach starting from the back gate. [chuckles]
- SPSpeaker
From the back gate. [chuckles]
- VSVictor Senapaty
And-
- SPSpeaker
No, uh, uh, I think five kilometers from the back gate.
- VSVictor Senapaty
Yes.
- SPSpeaker
Yeah.
- VSVictor Senapaty
Just five kilometers.
- SPSpeaker
Yeah. [chuckles]
- VSVictor Senapaty
And then, um, when I told my parents that, "Hey, I am inclined towards, uh, going to Chennai," my parents wholeheartedly supported that decision. In their head, uh, the way they were playing that was that, uh, "Look, South India, Tamil Nadu, those guys study really hard."
- SPSpeaker
Yeah. [chuckles]
- VSVictor Senapaty
"They're extremely serious, extremely disciplined. We want you there. Great choice!" [chuckles]
- SPSpeaker
Can I just say that I'm also Odia. I also have Odia parents, and they also believed forever-
- VSVictor Senapaty
Yeah
- 23:52 – 25:23
Victor’s Insti Story
- SPSpeaker
like? Were you, uh, were you an entrepreneur, uh, uh, in campus?
- VSVictor Senapaty
No, I wasn't. I, uh, I, in fact, um, feel like I could have done a lot. You know, campus definitely offers a lot of opportunities, um, you know, probably more so, a lot more so now. Uh, and, uh, yeah, as in-... not much. I didn't do a, not m-
- SPSpeaker
I have to ask you, did you go to the beach? [chuckles]
- VSVictor Senapaty
I went to the beach. I went to the beach, but then I realized that it's really hard to go to the beach. [chuckles]
- SPSpeaker
Yeah. [chuckles]
- VSVictor Senapaty
You have to first, first of all, uh, you lose your cycle in the first six months.
- SPSpeaker
Oh, what? What, what? You lose your cycle in the first six months? You lost your cycle in the first six months?
- VSVictor Senapaty
Yeah, probably, yeah, probably. It's probably not even six months. Probably in the first three months you'll lose your bicycle.
- SPSpeaker
Oh.
- VSVictor Senapaty
It's, it's the same bicycle that everybody has.
- SPSpeaker
Yeah, that's true. That's-
- VSVictor Senapaty
You just don't know-
- SPSpeaker
Yeah, yeah
- VSVictor Senapaty
... where your cycle is, who has it.
- SPSpeaker
Yeah, yeah.
- VSVictor Senapaty
Somebody loses it-
- SPSpeaker
Yeah
- VSVictor Senapaty
... and then-
- SPSpeaker
Yeah, or a friend comes and says, "I'll borrow your bike," and then leaves it somewhere.
- VSVictor Senapaty
Somewhere.
- SPSpeaker
He's forgotten where he's left it.
- VSVictor Senapaty
Exactly.
- SPSpeaker
You've forgotten who you gave it to.
- VSVictor Senapaty
Exactly.
- SPSpeaker
Yeah, it's gone. So then you're walking for the rest of the four and a half years.
- VSVictor Senapaty
Yeah.
- SPSpeaker
Or three and a half years.
- VSVictor Senapaty
Or you have to, you know, ask someone for a cycle, cycle all the way, or you have to haggle with an autorickshaw wala, which is-
- SPSpeaker
Yeah
- VSVictor Senapaty
... crazy.
- 25:23 – 31:09
The Truth About IIT Coaching | Why “admission” is not the real end goal
- SPSpeaker
You must have stayed away from home.
- VSVictor Senapaty
Yeah.
- SPSpeaker
Um, so, uh, there's a, there's an experience you go through before IIT, right?
- VSVictor Senapaty
Yeah.
- SPSpeaker
And then it's a really hard exam. You come here, whether it's to Madras or to any other campus. It's like a big sigh of relief, like, "This is done."
- VSVictor Senapaty
True.
- SPSpeaker
And then I think, at least to me, the first one year I didn't do much at all-
- VSVictor Senapaty
Yeah
- SPSpeaker
... except just go for classes and do the bare minimum.
- VSVictor Senapaty
Yeah.
- SPSpeaker
I think there's, there's a period of time that it takes to just recover from the JEE experience, [chuckles] right?
- VSVictor Senapaty
Yeah.
- SPSpeaker
Yeah, I can imagine.
- VSVictor Senapaty
I would, I would probably, you know, differ a little bit there. It's not the, you know, uh, uh, what do you call that? Like, the mental relaxation, uh, that I was looking for, at least in my case. It was not like I was mentally overwhelmed after preparing so much for IIT. It's more about, uh, uh, you know, an idea that I am right now, uh, you know, at the pinnacle, and there is nothing... What else is there to go?
- SPSpeaker
Mm.
- VSVictor Senapaty
I think if that would've been shown a lot more, that, "Look, you're, you're at a great stepping point now-
- SPSpeaker
Mm
- VSVictor Senapaty
... and from here, there are great, awesome places that you can get to, uh, awesome things that you can build," I think things would've been a little more different.
- SPSpeaker
But you eventually started building, so what was the change in you from the, say, the first year, uh, Victor, to the, to the Astroworks Victor? What changed that you decided to build?
- VSVictor Senapaty
That, uh, that was just a self-realization that hit me when, uh, I sat for placements in college. That's when I realized that, "Whoa, people have actually done, uh, done things. They've actually, uh, you know, improved a lot. They've, you know, explored many avenues, and, um, I could have also done the same." Uh, so that's when I decided that, uh, "Okay, so wherever I go next, whatever I, else I do in life, I'll sort of understand that, you know, I'm only at a stepping point, and there are a lot more, you know, great places to get to."
- SPSpeaker
Yeah. Very interesting. I think in JEE coaching days, this idea gets sold to you that, uh, the end goal is admission.
- VSVictor Senapaty
Yes.
- SPSpeaker
Uh, but you are saying that there's- the end goal is not admission at all, like there's always something more and, and a further distance to go.
- VSVictor Senapaty
Yeah, of course. I can understand why that end goal is sold at that point of time.
- SPSpeaker
Mm.
- VSVictor Senapaty
At that point of time, people want you to put your 100%-
- SPSpeaker
Yeah
- VSVictor Senapaty
... in that. But then, even after that, I feel like if there's a counseling that's done, right when students come in, to tell them that, "Look, you were sold a lie." [chuckles]
- SPSpeaker
[chuckles] Half-truth.
- VSVictor Senapaty
Yeah, half-truth-
- 31:09 – 32:37
Moving Past Stressful Times & Building Your Own Career At IIT Madras
- SPSpeaker
move past that?
- VSVictor Senapaty
I, um, you know, in my head, the way I moved past that is, look, I'm gonna see this now as something that I got to do. Uh, but once I get a job, which I did, over... You know, eventually everyone does. And, you know, uh, then I was like: Look, uh, you know, I should now, um, you know, rethink about whatever-
- SPSpeaker
Mm
- VSVictor Senapaty
... uh, mistakes I made earlier, which I told you about, right? Which is not really utilizing the opportunities that IIT gives you.
- SPSpeaker
Yeah.
- VSVictor Senapaty
Um-
- SPSpeaker
Which is, uh, I think there's a, there's a sentence I've heard that the mistakes we regret are less of commission and more of omission, things we didn't do-
- VSVictor Senapaty
Yeah
- SPSpeaker
... rather than-
- VSVictor Senapaty
Yes
- SPSpeaker
... the things we did.
- VSVictor Senapaty
You're absolutely right. So that's when I decided that, look, I am going to do something which I want to do now, uh, which is I want to... You know, even if, uh, you know, I want to do a MBA, I want to get into the business world. I want to, you know, prepare for, uh, CAT and get to a really good college. And, you know, once I get there, [chuckles] I shouldn't stop and, you know-
- SPSpeaker
Yeah
- VSVictor Senapaty
... relax and feel like, "Oh, I've gotten here."
- SPSpeaker
So you s- you sat for placements. You're saying that it was a sort of a reality check for you in terms of how you approach-
- VSVictor Senapaty
Mm
- SPSpeaker
... uh, opportunities, right?
- VSVictor Senapaty
Yeah.
- SPSpeaker
Um, after IIT, you did an MBA also?
- VSVictor Senapaty
I did.
- SPSpeaker
So was it a different experience in your MBA?
- VSVictor Senapaty
It was. It was.
- 32:37 – 34:00
Victor’s MBA Story & Introduction to Global Competitions in Finance
- VSVictor Senapaty
Uh, so, um, you know, uh, you know, as I told you, right, my, um, idea was that I'm going to fully utilize, uh, the platform that I'm given. Uh, so when I was in Delhi, when I was in FMS, uh, I made sure that, uh, uh, you know, if I enjoyed finance, I went, uh, you know, I went my, out of my way, I went out of academics and did a lot of finance projects, get into a lot of finance, uh, you know, sort of global competitions. Uh, so yeah, as in it was quite interesting. As in I enjoyed... I re-enjoyed the learning process that used to be there pre, uh, getting into IIT.
- SPSpeaker
JEE days. Mm.
- VSVictor Senapaty
J- JEE days, right, as in the wonder and the fun of learning, and learning something new, and getting really deep into that and, you know, uh, really getting into the core, uh, trenches of it.
- SPSpeaker
Yeah.
- VSVictor Senapaty
Uh, so yeah, that's what I did.
- SPSpeaker
Okay. I think there's a gap in my understanding, is basically from how did you move from being, uh, Awakened Victor? [chuckles]
- VSVictor Senapaty
Yeah.
- SPSpeaker
Uh, Victor 2.0 to the startup Victor.
- VSVictor Senapaty
Yeah, so that was a part of being awakened.
- SPSpeaker
Okay.
- VSVictor Senapaty
Yeah.
- 34:00 – 38:47
How Victor’s Impatience Led Him to a Life of Entrepreneurship
- SPSpeaker
So after FMS, did you do a job or did you start up immediately?
- VSVictor Senapaty
No, so I didn't know so much about, um, entrepreneurship back then when I was in, uh, FMS. My dream was to get into one of the best finance jobs, uh, into an investment banking job, and that's what I got in. So I joined an investment, investment banking firm. Um, it was apparently the dream that I really wanted to, uh, get to. But then, uh, once I started working, that's when, uh, you know, I sort of did not really enjoy, uh, the work, uh, as much as I had built it up in my head. Uh, I used to think that the job is gonna be really exciting and, you know, intellectually stimulating, and the sort of, uh, finance knowledge that I had, uh, I'm gonna be able to use that. But, um, I realized that, uh, like in any traditional sort of industry, uh, probably you have to go through a lot of-
- SPSpeaker
Yeah
- VSVictor Senapaty
... uh, you know, uh, period where you're doing a lot of not-so-great, not-so-intellectually-stimulating work, make yourself visible, uh, prove your worth to the organization, and-
- SPSpeaker
Then, then you get those.
- VSVictor Senapaty
Then you get those sort of stuff. And I was too impatient for that.
- SPSpeaker
Mm.
- VSVictor Senapaty
Uh, so I thought-
- SPSpeaker
No, I echo with this. I, I started my career in Hindustan Lever. I left in 15 months-
- VSVictor Senapaty
Yeah
- SPSpeaker
... because I felt like, "Okay, "..." but the idea was also that it'll take me many years-
- VSVictor Senapaty
Yeah
- SPSpeaker
... to really do much.
- VSVictor Senapaty
Yeah.
- SPSpeaker
But when I look back, I feel like I left too soon. I should have stayed for a little longer, crystallize my learnings a bit more.
- VSVictor Senapaty
Yeah.
- SPSpeaker
Very in- Like, that sense of impatience-
- VSVictor Senapaty
Yeah
- SPSpeaker
... I felt.
- VSVictor Senapaty
Uh.
- SPSpeaker
I can echo when you say this sentence, that there was a sense of impatience. I, I, I can, I can say- I mean, I went through that, too.
- VSVictor Senapaty
Yeah. As in, I don't feel that impatience from a point that, uh, I have ever felt that I should contin- I should have continued.
- SPSpeaker
Mm.
- VSVictor Senapaty
I never feel that I should have continued. Uh, I think it was the right impatient-
- SPSpeaker
Okay
- VSVictor Senapaty
... uh, you know? I wasn't really learning.
- SPSpeaker
Mm.
- VSVictor Senapaty
Uh, you know, it was, uh-
- SPSpeaker
Very interesting, okay.
- VSVictor Senapaty
Yeah.
- 38:47 – 41:40
How Was Propelld Scaled Up?
- SPSpeaker
Uh, I remember you talking about this earlier, about, um, uh, sort of, uh, piloting education loans in a small way before really going into Propelld in a big way.
- VSVictor Senapaty
Yeah.
- SPSpeaker
Uh, can you give us that story as well?
- VSVictor Senapaty
Uh, so when we started, we, um, uh, you know, we, uh, picked up our phone and started calling a lot of institutes, uh, that whether they would want a product like this. Uh, you know, of course, we heard probably like, you know, a lot of nos, but there was just one guy out of, uh, Calcutta. He was running a- He had come from the US, so he had an understanding. He was a little more forward-looking than a lot of other people.
- SPSpeaker
Mm.
- VSVictor Senapaty
He could see the potential of a product like this. Um, other people were thinking of it from a point of, uh, what is right now available in the market and not seeing a future version of it. Um, so he invited us to Calcutta. We used to, you know, work out of his institute. Uh, and, you know, we, we started, uh, our product there, where me and Brijesh used to go and speak to the students and, uh, build a product for them, understand their needs.
- SPSpeaker
Y- You're saying this is a product where, uh, you're sort of, uh, uh, evaluating the credit risk based on the-
- VSVictor Senapaty
Institute
- SPSpeaker
... the course and the student?
- VSVictor Senapaty
Student.
- SPSpeaker
Student's course.
- VSVictor Senapaty
Yeah. So it, it was very simple for us because we were present at that institute.
- SPSpeaker
Yeah, it's one institute.
- VSVictor Senapaty
Yeah, it's one institute, right? And that's how probably you start. Because we were there at that institute, we understood the quality of the promoter, what he really brings to the table, uh, the teachers that are there, the kind of students that are coming in, their ambitions- the ambitions of those students, the pedigree of those students. So we understood really, uh, what's going on there, and we were a lot more comfortable in, uh, giving out loans there. The loans were also very small amounts as compared to traditional education loans. Uh, this was not a traditional degree. This was a, uh, you know, this was a course, this was a, uh-
- SPSpeaker
Upskilling course.
- VSVictor Senapaty
... upskilling course, right, in data science and-
- SPSpeaker
Nice.
- VSVictor Senapaty
Yeah.
- SPSpeaker
So from that one institute, today you are present in how many institutes?
- VSVictor Senapaty
I'd say more than probably close to around, uh, 600, 700 institutes. I-
- SPSpeaker
Nice
- VSVictor Senapaty
... would have to come back on the exact numbers.
- SPSpeaker
And also, you have sort of moved from upskilling to higher ed-
- VSVictor Senapaty
Yeah
- SPSpeaker
... uh, coursework. So I have a question here. Uh, in this journey of, uh... I mean, your personal journey is very interesting. Uh, uh, we spoke till Propelld, and, and even in Propelld, going from one institute to so many institutes, hundreds of institutes, and one loan to lacks of loans, uh, say, 1 crore AUM to 1000 crore AUM, how has the organization changed? How have you changed as a person? What are the transformation that's happened? Like, if you look at Victor from six
- 41:40 – 44:44
How Did Propelld Evolve?
- SPSpeaker
years back-
- VSVictor Senapaty
Yeah
- SPSpeaker
... how different a person that was?
- VSVictor Senapaty
There's a, there's a massive difference, right? As in, the org obviously grew from, uh, you know, as small as just the three of us, uh, pitching the idea to, you know, a bunch of people in our first accelerator program, to, uh, setting up our office, uh, which is probably a, you know, 10 by 10 square feet, uh, you know, room, where there are about six or seven people, uh, to the point now where we are close to around 300, 350 odd team. Uh, so yeah, uh, you know, in terms of, um, you know, personally, I would say personally and professionally, um, the, you know, the- a lot of changes in me have been with respect to, uh, how do you-... see signals, how do you understand signals, uh, from noise? Um, how do you differentiate between signals and noise, and, um, how do you zero down on your top three signals? How do you optimize and focus the org's effort in a, uh, you know, in one direction?
- SPSpeaker
Mm.
- VSVictor Senapaty
Um, how do you figure out opportunities? Which are the opportunities which are more long-term, uh, and how do you balance the long-term, uh, you know, durable value building versus something very short-term and tactical? Uh, people management-
- SPSpeaker
Very interesting.
- VSVictor Senapaty
Okay.
- SPSpeaker
So what you are saying is that one of the biggest things that you have gained over the last few, uh, maybe six, seven years, is your ability to sort of understand which- what to listen to, what not to listen to, what to, what to prioritize, what to take as a strong input, and what to keep, uh, aside.
- VSVictor Senapaty
I would also... You know, tha- that's correct. I would also add, uh, you know, how do you sort of become an org, which is, which is to say that how do you row in one direction and, you know, so the structure around that, the people around that, and how does that entire mass of, uh, so many people s- you know, look in one direction? Uh...
- SPSpeaker
Fair enough. When you're starting off, you have a visibility of maybe one or two years. Now, you probably as an org, you have a visibility of 10 years or 20 years, what Propelld wants to be in 2030, 2040-
- VSVictor Senapaty
Yeah
- SPSpeaker
... sort of like a end vision kind of thinking.
- VSVictor Senapaty
Correct. You're absolutely right. It starts opening up way more as you put yourself out there.
- SPSpeaker
Mm.
- VSVictor Senapaty
Uh, as you start taking those, you know, you've, you've, you're absolutely right, you know just 10 steps. As you start taking those, you know, three, four steps, the step from 10 to 100 probably starts opening up, so.
- SPSpeaker
Can you, um... I, I mean, uh, you would've had a parallel journey in terms of- Actually, before I get to that, I have a question that's coming up, which in my mind, which is that, of course, the pandemic meant different things to different
- 44:44 – 51:44
What Was the Pandemic Effect on Propelld?
- SPSpeaker
people-
- VSVictor Senapaty
Yeah
- SPSpeaker
... but for lending companies, for fintech companies-
- VSVictor Senapaty
Yeah
- SPSpeaker
... it was like a, you know, a hammer, a sword, and-
- VSVictor Senapaty
Yes
- SPSpeaker
... how, how did you, how, how was your, uh, how was your pandemic story? [chuckles]
- VSVictor Senapaty
It's very, it's very interesting, um, uh, you know, that you brought that up, right? So actually, it, it was, it was actually quite the opposite for us. Uh, we grew massively during the pandemic. Uh, you know, the traditional, um, you know, the traditional sort of, uh, knowledge or the traditional gut instinct, uh, was that every lending company is suffering because people are not repaying back their loans, which was very natural because, you know-
- SPSpeaker
Businesses have stopped.
- VSVictor Senapaty
Businesses have stopped.
- SPSpeaker
Salaries have stopped.
- VSVictor Senapaty
Salaries have stopped. Uh, you know, there's a lot more at stake right now for people than repaying back their EMIs. A lot more-
- SPSpeaker
Absolutely
- VSVictor Senapaty
... for life is, yeah, way more, uh-
- SPSpeaker
Precious
- VSVictor Senapaty
... precious and, you know, a lot more fundamental things at stake now. Um, but in fact, um, you know, we, you know, uh, we have always had, as I told you, right, we've always had that belief that education is an investment. And, um, our belief was that in a period like this, people, uh, when people don't have a lot of visibility on what's going to happen, uh, they're actually going to invest a lot more in educating themselves. Um, you know, after taking care of their life and, you know, being safe, uh, the investment in education in terms of, if not money, at least their attention, and how much they really value education, is going to go up a lot more as compared to coming down.
- SPSpeaker
Mm.
- VSVictor Senapaty
And our thesis always has been fundamentally that, you know, people who are invested, uh, you know, there's a lot more intent, and of course, the ability will also come in the future.
- SPSpeaker
But this is a very- I mean, of course, looking in retrospect, we know that people invested more in courses, they studied more. So much data that now says that, uh, mm, people used the pandemic as a way to upskill themselves. But going into the pandemic, this is a very contrarian view, right?
- VSVictor Senapaty
It is.
- SPSpeaker
In, in one month down into the pandemic, nobody was saying that people will study more.
- VSVictor Senapaty
It is, but historically, if you look at it, right-
- SPSpeaker
Mm
- VSVictor Senapaty
... uh, at, uh, any crisis that comes in, where there's a job crisis or an economic crisis, historically, that's been the trend, though.
- SPSpeaker
That's very interesting. But how were your internal conversations? How were your boardroom conversations, uh, with respect to this decision of you to double down, uh, during the pandemic?
- VSVictor Senapaty
So naturally, the boardroom conversations, um, uh, you know, were, uh, hard, uh, I should say. And, um, you know, of course, our investors ended up supporting us, but they were, you know, sort of hard conversations to have with. But, uh, you know, uh, there were, there were questions of, "When everybody else is sort of, uh, running the tap down, uh, why are you turning it on even more?" Um, and uh, but then we had our conviction and our thesis on that, and, you know, uh, uh, finally the, you know, boardroom also was convinced that that's a right way to go about it.
- SPSpeaker
Mm, okay, but it's one thing to convince the boardroom. But did your, did your NPA hold?
- VSVictor Senapaty
It did.
- SPSpeaker
Okay.
- VSVictor Senapaty
Uh, you know, if it wouldn't have, then, um, uh, you know, the board would have said that, you know, we did the wrong decision in going in there. But, um, yeah, that's, that's actually the proof of the pudding-
- 51:44 – 57:00
The Byju’s Breakdown
- SPSpeaker
Please go ahead
- VSVictor Senapaty
... name, right? But yeah, so, um, you know, because you have a very large, uh, you know, large funded-
- SPSpeaker
Yeah
- VSVictor Senapaty
... the big blue-eyed boy-
- SPSpeaker
Yeah
- VSVictor Senapaty
... uh, in the tech industry.
- SPSpeaker
Yeah.
- VSVictor Senapaty
Uh, uh, BYJU'S success or failure sort of, uh, defined the entire ecosystem. There are a lot of people niche, right? As in, if BYJU'S would've been really successful, a lot more money would've come in, into edtech.
- SPSpeaker
Mm.
- VSVictor Senapaty
When BYJU'S meltdown happened, uh, it actually took away a lot of, uh, trust of the lending ecosystem in education as a industry.
- SPSpeaker
Because you're saying that, uh, maybe parents or customers, um, said that, "Oh, the lenders have forced this product on us," or, "The product was not great in the first place," or something like that?
- VSVictor Senapaty
Exactly. As in, it's- so basically, what happened there is, uh, of course, the products, as in everybody... All of us know, right? As in the products were sold a lot, mis-sold a lot as well. People didn't really know what they were getting into. Uh, and, you know, a lot of, uh, you know, uh, lenders had seen that as an opportunity and gotten in.
- SPSpeaker
Mm.
- VSVictor Senapaty
Uh, but then when it stopped working, the large lenders who, you know, lost a lot of money, you know, I've- I, I know lenders who have suffered from close to around 20% NPAs on their BYJU'S portfolio, which has been 50% of their, uh-
- SPSpeaker
Entire AUM
- VSVictor Senapaty
... overall dispersals and overall AUM. That's significant, right? You can't come back from there. It's very hard to come back from there.
- SPSpeaker
Yeah.
- VSVictor Senapaty
So as an industry, the lending industry then sort of saw the education industry again in a very negative light.
- SPSpeaker
Are you saying that at that point, your original thesis of looking at the course-
- VSVictor Senapaty
Yeah
- SPSpeaker
... and evaluating the course suddenly became more important?
- VSVictor Senapaty
Yes, because we had no exposure in BYJU'S. We continued to do the things that we were doing. So we never had exposure in BYJU'S, because we never understood the product. We never understood, uh, how it's beneficial for a parent. We never went in there. So the institutes that we were supporting, and the institutes, and the students going to those particular institutes and courses that we were funding, we continued to double down while the industry, you know, finance, the entire lending industry took a back seat. Uh, so again, sort of, you know, delivering on that, uh, thesis that, you know, on, on our core thesis, on our core principles, and, you know, that was also another pivotal point for us.
- SPSpeaker
That is very interesting. Let me, let me say it in my words. Tell me if I'm right.
- VSVictor Senapaty
Sure.
- SPSpeaker
Uh, if you're the CEO of a lending industry and, uh, you are responsible for growth-
- VSVictor Senapaty
Yes
- SPSpeaker
... which means that you can only grow if you take a certain amount of risk, uh, you give out more loans. If you grow too slowly, then that's not good. If you grow too fast, that's not good. Um, you want to, as you said earlier, buy risk.
- VSVictor Senapaty
Correct.
- SPSpeaker
And your method of buying risk is to evaluate the course.
- VSVictor Senapaty
Correct.
- 57:00 – 58:30
Propelld Setting An Example
- VSVictor Senapaty
um, there are some people who, of course, uh, you know, who are, uh, you know, uh, making inroads in this industry as well, in the education industry, and we feel that it's a great thing as in-
- SPSpeaker
Mm
- VSVictor Senapaty
... it's a huge market. It's-
- SPSpeaker
Yeah, I mean-
- VSVictor Senapaty
It's close to a $100 billion market, and we're not, we're not a consumer tech play.
- SPSpeaker
Yeah.
- VSVictor Senapaty
Uh, we're not going to be two people, uh, or duopoly sort of working in that industry.
- SPSpeaker
Yeah.
- VSVictor Senapaty
Uh, lending does not work that way. As in, in lending, uh, you care about your profits, you care about your risk, you care about your liabilities, and, you know... So there can be 10 pe- 10 players here, and the industry is going to benefit from that. So yeah, we are seeing a few people come in, uh-
- SPSpeaker
Nice
- VSVictor Senapaty
... after our experience.
- SPSpeaker
Nice. So your thesis is being proven by multiple, uh... A- and what you were saying earlier, that you want to influence the industry to follow a more trustworthy model, that's being-
- VSVictor Senapaty
Yeah, exactly. As in, apart from, you know, apart from the fact that what we got, uh, what we achieved from those moments where growths, uh, you know, where growth, uh, in both of those moments, right? And what we achieved from there is a lot of trust of that industry partners on Propelld, that Propelld is a long-term player, and they really understand the education ecosystem, and they are not just somebody or they are not just-
- SPSpeaker
Right
- VSVictor Senapaty
... some other, other person.
- SPSpeaker
Very interesting. Thank you for sharing. I also want to ask you, uh, you are the first guest we have had from a fintech background.
- VSVictor Senapaty
Yeah.
- SPSpeaker
Um, so the question I want to ask you is: How has fintech
- 58:30 – 1:03:15
How Has FinTech Evolved as an Industry in India?
- SPSpeaker
or lending or credit risk or underwriting, all these topics, how have they changed in the last 14, 15 years, given that, you know, we've had sort of like a digital revolution, and where's the role of tech in all of this?
- VSVictor Senapaty
We play in a highly regulated, uh, industry. It's, it's regulated for the right reasons. Um, you know, uh, we've, we've seen, uh... You must have followed a lot of, uh, you know, cases where there were a lot of, you know, illegal apps and, you know, sort of illegal ways of collections and, you know, Chinese apps and so on, right? So there's a reason it's highly regulated. So, um, I think I'll first speak about, uh, you know, the transition that has happened from a mindset point of view. Uh, I feel like, um, there are, uh, there have been three phases from a regulation point of view, which has influenced what kind of business models, uh, you know, entrepreneurs and investors have also looked at it. Um, there was a first phase, uh, you know, which was, uh, probably around the time of, uh, uh, wait, uh, close to around '16, say, '18 or '19 ke aas pass. So, uh, you know, from 2016 to, to say 2019, when things were opening up a lot more. As in, um, you know, there were a lot of, lot more digital rails infrastructure that were opening up. Uh, you know, eKYC was opening up. RBI wanted things to be a lot more smoother. RBI wanted a lot of financ- financial penetration. They were giving out licenses for P2Ps. Uh, they were trying out different means of raising money. P2P is, you know, is a different way of raising money from traditional, instead of traditional sort of sources. Um, now that really helped, uh, and, you know, a lot of fintechs, a lot of entrepreneurs, a lot of VCs came in. The prevalent thought process then was to have, um, you know, business models which are more fintech, which would look at lending from a extremely scalable, sort of like a consumer play, and value it that way. Uh, but then, uh, slowly, you know, once after a wave of that, uh, it also gave birth to a lot of these illegal apps. Uh, and that's when-... uh, there came a phase of clamping down on them. And so, you know, RBI's regulations became changed, and, you know, they wanted things in a much more closed, uh, loop, in a closed sort of ecosystem, and they brought in a lot of checks and balances and processes, uh, which of course, helped the consumer. Um, but then what that led to do was, what that led to happen was that, uh, the mindset of the business model and the mindset of entrepreneurs and VCs, uh, y- you know, investors, uh, it started changing towards business models which are way more traditional. Uh, the way NBFCs have sort of, uh, you know, the business model similar to an NBFC, which is run in the past. Uh, so-
- SPSpeaker
Sure. It opened up a lot because of digital, uh, like a quick wave of digitalization.
- VSVictor Senapaty
Correct.
- SPSpeaker
And then, sort of, uh, we realized that there's a lot of NPA or whatever. There was a lot of, uh, high, high-interest lending-
- VSVictor Senapaty
Yeah
- SPSpeaker
... lot of errors happened, and then it sort of came back to an older model.
- VSVictor Senapaty
To an older model, from a business model point of view. So now, what happened was, um, from a tech point of view, the way people think about it is that the business model continues to be a, you know, an NBFC or a financial services business model, the way it has been there in the past or the way public, uh, you know, publicly listed NBFCs and banks are sort of looked at. But then how do you now use tech to do those things, but way better and way more efficient? That's how things are right now. It's not a, you know, ear- the earlier model was more about, um, you know, using, uh, sort of like a consumer game and, you know, uh, lending being like a consumer game, and tech being seen that way. Uh, but here it's more about, you know, you understood, right? As in-
- SPSpeaker
Yeah
- VSVictor Senapaty
... the business model continues to be the same.
- SPSpeaker
There was a phase when you were saying every app is a fintech. I remember that-
- VSVictor Senapaty
Yes
- SPSpeaker
... uh, wave where-
- VSVictor Senapaty
Yes.
- SPSpeaker
Uh, that wave-
- VSVictor Senapaty
Yes
- SPSpeaker
... is gone, you're saying?
- VSVictor Senapaty
Yes.
- SPSpeaker
It's sort of dialed back to an older model, but much better driven and more efficient because of a high use of tech.
- VSVictor Senapaty
Correct. Like, for example, if I talk about how, uh, you know, uh, we look at using tech, right? So look, for us, core pieces of using tech are on two areas. One is the entire heart of our
- 1:03:15 – 1:04:43
Closing Thoughts
- VSVictor Senapaty
risk and credit, uh, which is to say: how do we, uh, evaluate, uh, institutions? How do we evaluate risk? How do we monitor that? How do we build triggers? How can we make it, uh, an experimentative, uh, you know, learn, test hypothesis, you know, uh, learn from that, iterate and, you know, build models, uh, that sort of a thing. And a lot into sort of how do we build more efficiencies and, you know, sort of bring in a lot of value, you know, in the processing piece of it, uh, in the running of the company piece of it, so that, you know, that value can then be given back to the customers or to the institute. So those are the primary pieces that we use, uh, you know, technology for, core pieces for that.
- SPSpeaker
Nice. And that you're saying that, that this is the norm now, this is the way-
- VSVictor Senapaty
This is the norm now.
- SPSpeaker
This is the way in the industry.
- VSVictor Senapaty
Uh, yeah, as in-
- SPSpeaker
Nice.
- VSVictor Senapaty
Yeah.
- SPSpeaker
Okay, very nice. Uh, you've shared a lot with us, uh, about your own journey, about your company's journey. Uh, and thank you for being so open. I know that you're in a regulated space, and it's not, it's not easy for, um, for fintechs to share so much, but thank you so much for us, we learned a lot. Um, if you're watching this podcast, um, uh, share, like, subscribe. If you want to follow what Victor does or what his companies does, you can find them online, uh, you can find them on LinkedIn. Thank you.
- VSVictor Senapaty
Thanks for having me here again, Jipesh.
Episode duration: 1:04:48
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