Credlix | Acquisition Strategy

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About Credlix

• Credlix is the fintech arm of Moglix, a B2B Commerce Unicorn in the Industrial & MRO procurement space.
• Credlix operates in the space of Digital Trade Finance, providing financing solutions to businesses in India & Mexico.
• It has recently acquired an RBI-licensed NBFC to lend from its own books.
• Key Customer Segments: Enterprises, SMBs, & MSMEs in India.
• Products Offered by Credlix:
• • Major Products in Domestic Business
  • • Early Payment Solutions (Factoring/Reverse Factoring)
    • Sales Invoice Discounting
    • Purchase Order Finance
    • Receivables & Payables Finance
    • Channel Finance
  • Major Products in Exports Business
  • • Exports Financing Solutions
    • • Invoice Discounting
      • Purchase Order Finance
    • Import Financing (New Product)
    • Term Loans (New Product)​

The Product

• Core Offering Considered for this Project - Credlix for Exporters
• Stage of the Product - Early Stage Scaling
• Credlix for Exporters
• • What does the product solve for?
  • • Immediate Working Capital Solutions for Exporters
    • Increase Revenue by Scaling Exports Business
    • Better Cash Flow & Risk Management for Businesses
  • What is the core value prop?
  • • Immediate Working Capital within 48 hours
    • Collateral-free Financing Solutions
    • Digital Underwriting model based on Buyer’s creditworthiness
    • Non-recourse basis
    • Protection against Buyer bankruptcy
    • Digital Platform to upload invoices & avail financing.
  • Who are the Target Customer Segments:
  • • Enterprises (turnover > 1500 Cr)
    • Mid Market (turnover 250-1500 Cr)
    • MSMEs( turnover < 250 Cr)
  • Product Use Cases
  • • Invoice Discounting/Factoring (Post shipment Finance)
    • • Majority of Exporters usually have a higher payment tenure ( 60-90 days) with Global Buyers. Even after the material is shipped, the payment from Buyers gets blocked for the payment tenure. This creates a working capital management problem for the exporters to run their regular business.
      • Factoring is one of the solutions to address this gap.
      • Once the material gets shipped from the port, the Exporters can avail of financing of up to 90% of their invoice value from credlix within 48 hours. On the due date, the buyer pays back the payment due to Credlix. Credlix then returns the balance payment to Exporters after making deductions such as interest charges, processing fees, etc.
    • Purchase Order Finance
    • • On obtaining a PO from a global buyer, the exporter can avail financing up to 40% of the PO Value from Credlix.
  • Major Trade Routes: India → US & India → Europe
  • New Trade Routes: Mexico → US
• Summary of Reviews
• • Positives
  • • Lowest Interest Rates in the industry
    • Good Customer Support
    • Transparency in Pricing
    • Good Dashboard & Ledger in the portal
  • Negatives
  • • Credit Limits are not getting increased. CL is the same for the past 2 years. No incentives are awarded for vintage/timely repayments.
    • Invoice Upload process - too many fields in the upload form.​

The User

• User Personas (ICPs)
• • Enterprises (Annual Turnover > 1500 Cr)
  • Mid Market (Annual Turnover 250-1500 Cr)
  • MSMEs( Annual Turnover < 250 Cr)
• Buying Decision Makers
• • Owners & CXOs (CEO/CFO/COO, etc.)
  • Finance Directors/Heads
• Problem Statements
• • Unable to grow their businesses due to high payment tenures from Buyers
  • Problems with consistent Cash Flow Management & Risk Management
• User
• • Awareness
  • • How did they discover Credlix?
    • • Referral from an existing Credlix Customer
      • Exports Council Events
      • Credlix Sales team reached out to their Factory, or in trade fairs.
    • Media Consumption Habits of ICPs (CXOs, Owners, Finance Heads)
    • • Youtube
      • Business News (NDTV/CNBC/etc.)
      • Facebook/Instagram
      • Linkedin
    • Acquisition
    • • Why did they choose Credlix?
      • • Interest Rates
        • Limits against their Buyers
        • Sales Teams Support
        • Transparency in Pricing/Deductions
    • Adoption
    • • Why did they continue to use Credlix?
      • • On Time Disbursements
        • Transparency in Pricing
        • Interest Rates
        • Customer Support
    • Retention
    • • Features they like, dislike, or want us to improve
      • • Positives
        • • Good Dashboard & Ledger in the portal
          • Lowest Interest Rates in the industry
          • Good Customer Support
        • Negatives
        • • Credit Limits are not getting increased. CL is the same for the past 2 years. No incentives are awarded for vintage/timely repayments.
          • Invoice Upload process - too many fields in the upload form.

More Details on Ideal Customer Profiles (ICPs)

The Market

• Current State of the Market :
• • India’s current Monthly Trade Exports is around $ 73 Billion, an increase of 14% YoY.
  • FY2023: Merchandise Exports: $451 Billion
  • Total 150k of Exporters @ USD 450 Billion of exports (50% SME share in total merchandise exports)
  • • Large Exporters: 10k (turnover > INR 1000 Cr)
    • Mid Sized Exporters: 25-30k (ITurnover bw INR 50 - 1000 Cr)
    • Small Exporters: 100k (turnover upto INR 50 Cr)
  • With the growing market, exporters don’t want to miss out on the big global deals because of their working capital crunch due to high payment tenures with global buyers. This makes a case for the Factoring companies to fulfill the credit gap in the market.
• TAM - $450 Billion ARR (RBI Research)
• SAM - $67.5 Billion ARR (SME Exports: 20% of $225 Billion + Large Enterprise Exports: $25 Billion (10% of $ 225 Billion)
• SOM - $6.7 Billion ARR (At 10% Market Share - 10% of SAM)
• Competition
• • Key Competitors:
  • • Banks (subvention led + PSL) - All the major banks have factoring products, but they take collaterals against the loans.
    • Drip Capital - $150 MM AUM
    • • *Drip Capital has raised a total of $415.1M in funding over 14 rounds. Their latest funding was raised on Oct 3, 2023,  from a Debt Financing round.*
      • *Drip Capital is funded by 27 investors. International Finance Corporation and Raison Wealth are the most recent investors.*
    • Modifi - $50MM AUM
    • India Factoring - $40MM AUM
  • Other Players & New Entrants
  • • Stenn
    • Reevoy
    • Tradewind
    • Incomlend
    • Volofin
    • Ofbusiness
    • Samunnati
• Credlix vs Competition: Credlix provides the lowest interest rates in the industry.

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Acquisition Channels (AS IS & White Spaces)

• Organic
• • Google Search (Organic)
  • Credlix Website
  • Youtube, Facebook, Instagram, & Linkedin
• Paid
• • Meta Ads - Facebook & Instagram (Maximum Budget Allocation)
  • Google Search Ads (GDN not yet deployed)
  • Youtube (Minimal Deployment)
• Content Loops (Experimented so far)
• • Blogs & articles on the Credlix Website
  • Interest Calculators (Credlix vs Competitors)
  • Generate Termsheet in 2 min Campaign - Product has created a feature to download the Termsheet in 2 min. Webengage Campaign is run on the Exporters Database, asking them to check if their Buyer is pre-approved with Credlix & to download the termsheet.
• Other Sources - Panjiva Research
• • Panjiva is an S&P Global company with a global database of imports & exports shipments. The data points in any specific trade routes can be fetched out from Panjiva.
• Referral
• • Social Referral
  • • Word of Mouth
    • Events & Conferences
  • Partnerships
  • • Chartered Accounts
    • Fintechs
    • ITFS Platforms
    • • Vayana TradeXchange
      • RXIL Trade Exchange
      • KredX
• Other Channels​
• • Factory Visits (FOS)
  • Industry Events
  • Seminars & Webinars
  • Trade Fairs
  • Local Association tie-ups

3 Acquisition Channels that I will be executing after GrowthX.

• • Channel Partnerships
  • • Direct Channel Partnership: To identify partners which address the same TAM, but are not direct competitors. (SaaS players, Carriers, Freight Forwarders, etc)
    • • Credlix can be embedded in the partner journey via product integrations.
      • Revenue sharing model can be negotiated.
    • Referral Program for CAs & other Fintech - the current referral program is entirely offline & not effective. A new digital self-serve referral journey is to be created for the partners.
    • • Credlix to provide a Whitelabel portal to the partners for their Client Management.
      • Client Invoices can be uploaded on the same portal by the Partners. Easy to Integrate APIs will be available too.
      • Visibility on the Referrals & Commission Dashboard will be provided.
  • Product integrations
  • • Marine Insurance - Partnership with an Insurtech to sell Marine Insurances to Credlix’s Customers. The revenue-sharing model can be decided.
    • FX Remittance - Partnership with a cross-border payment player to provide FX Remittance facility to Credlix Customers.
  • Product Led Growth
  • • FX Hedging - Partnership with Banks to create a wrapper around RBI’s FX Retail Platform for FX Hedging.
    • • As per the RBI Report, Banks misuse FX to earn from small + mid exporters. RBI launched an FX platform similar to UPI with almost NIL FX conversion up to $200Mn/yr.
      • Poor adoption as using the platform requires the Bank’s approval
      • To create a Wrapper around the platform just like PhonePe, and Gpay.
      • Provide an easy-to-adopt FX Hedging feature with a minimum cost of conversion in 100+ currencies
      • The product will be relevant for the entire TAM, and also for the exporters who do not want financing.
    • Credlix SaaS Platform - New SaaS Platform for Exporters with modules such as Docs Creation (CI, PL, etc.), Shipment tracking, Inventory Planning, Catalog Management, etc. The idea is to create a customer acquisition channel & then x-sell Factoring.

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