‘The corporate card market is ripe for change’

Volopay, a Singapore-based B2B fintech, is foraying into India after its domestic and Australian roll-outs. Its $29-million fund-raising in March this year saw participation by JAM Fund, Winklevoss Capital Management, and Accial Capital, among others. The big names backing Volopay are Shweta Rau of White Ventures, Amrish Rau of Pine Labs, and Jitendra Gupta of Jupiter. ROHIT BHAGERIA, the firm’s founding member, spoke with Raghu Mohan on how the corporate card market can be rethought. Edited excerpts:

How has Volopay been imagined?

We are a payable and receivable management platform. B2B businesses — which employ anywhere between 20 and 700 employees — use five to six programmes for banking, payments, corporate cards, or expense management (say, Expensify, or a similar kind of software), workflow process and another for accounting. And these reside in silos.

We are saying you can streamline your receivables and payables on a single platform. This is an all-in-one mini-erp (Enterprise Resource Planning). We can issue corporate cards on an instant basis to ‘ABC Company’. And all that a company needs is an administrator to oversee the issuance of any number of such cards to their employees.

How does it work? How is it “funded?”

It’s a corporate credit card and is not “funded” like a prepaid card. When you buy a laptop — as an employee of a company — the bill will get reflected on the Volopay platform. The money will get auto-debited from your bank account linked to the platform, or from your virtual account which you are holding on the platform. So, we become a distributor for banks and also reduce the risk for the bank, because 100 per cent of the credit risk is taken on by us. Globally, we issue co-branded cards with multiple issuers.

In Singapore, we use NIUM Pte; in Australia,

we use the financial stack of Airwallex and ANZ Bank. In India, we are launching a global credit card programme with SBM Bank. We have recently partnered with Visa’s Fintech Fast Track Programme. Depending on the local jurisdiction, this programme allows us to issue Visa corporate cards in the Asia Pacific region. The responsibility for repayment and liabilities of the corporate card lies with the company. In a nutshell, the company bears all the risk and pays for the approved transactions on the Volopay platform. But if that ‘ABC Company’ were to default, we will bear the cost.

And how do you assess the credit risk?

We have algorithms for on-boarding. We do the KYC — on your business, because at the end of the day, it’s a corporate card. So, we do that and obtain basic information about the company and then we analyse it primarily on three factors — your spending pattern via our platform number; your bank statements which we have obtained during the KYC process; and commercial bureau reports of the company.

What’s the limit on spending?

There’s no limit. In Singapore, we have underwritten a company worth up to $5 million! It’s one of the largest conglomerates in the travel space.

How different is your firm from say, an American Express, or the larger banks that offer spend-management services?

Well, in our case, the card is only a feature which is embedded on our platform. As I told you, we are a full-stack financial management mini-erp. It brings in efficiency and you needn’t have a large account-payables team. That’s why in the US, there are companies like Ramp, Brex, Airbase, Divvy (acquired by Bills.com), and Rho Commercial Banking. Similarly, in Europe, you have Spendesk, Soldo, Payhawk and Pleo.

Take Brex. It’s become a Decacorn — a startup valued in excess of $10 billion — within two years. You see, a Jpmorgan or a Wells Fargo can’t offer these kinds of functionalities.

I personally love Sofi (now listed on the Nasdaq), considering it brought real social impact in the lives of students by lowering the cost of education financing and helped them pursue their life choices. I was so inspired that I tried to build an almost similar business model in South Asia and South-east Asia, but unfortunately couldn’t scale up the venture due to the shadow banking crisis in 2018.

What’s your view on the entry of

non-banking financial companies (NBFCS) into the credit cards space?

It will have to follow the prerequisite net-owned fund requirement of $13 million (~100 crore). It’s a welcome move, considering all well-capitalised NBFCS with strong governance and welllubricated tech-stacks can partner with more fintechs. Fintechs anyway shouldn’t be 100 per cent reliant on banks as their preferred co-brand partners. Over the medium term, it will definitely spur the growth of affordable and lastmile distribution of short-term corporate and consumer credit offtake.

What is your funding profile like?

We have raised approximately $32 million in a mix of debt and equity. We have dollardenominated debt from very large private funds. By way of equity, we are backed by some of the world’s largest Silicon Valley investors like Y Combinator Company, Soma Capital, and Antler Global. Plus, Venturesouq from the Gulf, C P Ventures from Australia, Venture Capitalist from Indonesia — all top-line venture capital firms in their respective markets. And a leading Decacorn payment company in Singapore.