Expanding to India was a no-brainer decision for Lee Cheol-won.
“It took just five minutes to make the call,” said Lee, CEO of Balance Hero, a financial tech (fintech) start-up, “India is the only country that meets the three market criteria of size, growth and maturity.”
Balance Hero, also known as the “Toss (Korea’s first fintech unicorn) of India,” has surpassed 75 million cumulative domestic downloads in India. From the get-go, Balance Hero has pursued India as its target market, living up to the start-up saying that technology and idea have no borders.
Starting with a service like never before
Lee’s background is in strategy with leading business-to-business shopping mall iMarketKorea. He then started his own business in 2006 by selling call-waiting tones to Southeast Asian countries. Through this business, Lee experienced firsthand that nothing lasts forever. By 2009, apps offering free call-waiting tones began hitting the market and, soon after, consumers were no longer willing to pay money for the same product.
Lee quickly realized that the world was revolving around smartphones, which led him to shift his sight to the app business. He thought why not go to a bigger market and that’s when India came to his mind. On why he chose India, Lee explains that there is no better country where the market size is big with few competition. In January 2015, he established his India corporate office and introduced the financial services app “True Balance.”
In India, smartphone data is prepaid. Users purchase 1GB or 2GB of data and once they run out, they recharge more. Taking this system into account, Lee developed a service that enables users to track their data usage on a real-time basis. He coupled this with an added service allowing free and paid recharging services.
“At the time, there were no other apps that offered data tracking,” said Lee. “It was so popular that downloads surpassed 10 million in just 19 months after the initial launch.”
Lee added functions that enabled everything from online shopping to bill pay for gas and electricity. It was an intentional strategy meant to keep users, who primarily logged on to track their data usage, engaged in other services.
50-fold growth via reseller strategy
While searching for other money-making business possibilities, India’s payments market caught Lee’s attention. There are roughly 1 billion people in India who aren’t able to make online payments because they don’t have a bank account. This is the reason why there are varying payment services in India that makes payments for users in exchange for a transaction fee.
Balance Hero created a payment service app. It enables consumers, who are in good standing, to certify the True Balance app for other individuals without a bank account and then make payments on their behalf in return for a fee.
Starting the payment service significantly powered True Balance’s growth curve. Last year is when the company rose to take market leadership. The yearly transaction amount grew 50 times compared to the previous year and some 300,000 transactions were made per day via True Balance. Investors were enthusiastic over what they saw as the “new dinosaur of fintech.” Softbank Ventures, among other investors, reached out, contributing to the company’s cumulative investment capital to pile up to 74 billion won.
Lee recently took on a new challenge. In September, he launched a small-dollar lending service after becoming licensed as a digital lender by India’s financial authority. After submitting an application, it only takes five minutes for the funds to get deposited. It is hassle-free, but the interest rate is high at about 1 percent per day. Since there is a significant population without reliable data from credit agencies, the company devised its own credit evaluation model.
The lending service arm of True Balance is finding its place in the market. The average loan amount ranges from 80,000 won to 90,000 won, and the amount is climbing by 10 percent each day.
Startups looking to expand overseas should consider India, Lee advises.
“A large market means there has to be room for growth,” he said. “An entrepreneur should be able to capture a business opportunity after carefully observing the market.”
By Hee Eun Yoon
<Translated by Jane Han>