Razorpay’s Harshil Mathur says user-specific fintech will be the next big focus area
Harshil Mathur believes that a new wave of fintech is imminent and it will focus on solving more complex aspects of finance.
While the first wave of fintech was about solving the simplest problems in the system – making digital payments, or investing via digital platforms – the second will solve more complex problems, such as tailored insurance solutions that reward good behavior.
Personalized solutions are a big white space in the fintech industry at the moment, says Harshil, adding innovative solutions that cater to users’ specific needs after a comprehensive understanding of their financial health, profile and history can prove valuable.
Another area where fintech has not penetrated too meaningfully is B2B finance, i.e. fintech startups that deliver technology-led solutions to other businesses, said Harshil. For example, platforms that help businesses invest their spare cash, or help create virtual short-term spending cards for use.
“A lot of fintech has happened in the last five years and a lot more will happen in the next 10 years,” Harshil said in the 13th edition of YourStory’s TechSparks 2022 event.
No right way to build
Asked if he thinks startups should chase outside capital or start their path to growth, Harshil said, “there is no right way to build a business.”
If entrepreneurs have the choice to build a business by starting up, they should go ahead and do it. But there are areas, such as R&D, where capital provides benefits such as rapid growth and acceleration, and then external capital provides that springboard, he said.
However, Harshil also cautioned that when founders raise VC money, they need to accept and understand that the money comes with a big caveat: “If you raise even $1, you need to understand that you’re signing up for a path to aggressive growth. If you sign up for $100,000, you’ll earn 10 times that back.”
If blitz scaling is something founders find exciting, there’s absolutely no harm in raising VC money, Harshil concluded.
A common thread running through all our chats with startups and VCs during the three days at TechSparks was funding, and whether startups should rely on external capital as much as they do now.
Zerodha founder Nithin Kamath said that chasing valuations is a treadmill and sometimes what is best for the end user may not be what is best for an investor.
Other VCs and entrepreneurs said that outside capital is ultimately a debt obligation, and that diluting too much could mean working at your own company as an employee, not as a founder.
However, Harshil is of the opinion that “to each his own”. He just insists that founders understand what they’re doing, and why they’re doing it, rather than being driven by FOMO (fear of missing out).