India GameChanger enjoyed speaking with Rahul Jain, a co-Founder of AllCloud.  AllCloud empowers financial institutions with technology that enables scale and optimizes their operations.

Some of the topics that Rahul discussed:

  • Making the decision to move to AllCloud full-time from his family’s lending business
  • Moving customer interactions to a digital platform
  • Data aggregation and the insights that creates
  • Replicating the original lending model and branching out to more verticals
  • The implications of India’s UPI connecting with Singapore’s PayNow

Other titles we considered for this episode:

  1. I Didn’t Buy the Software, I Purchased the Idea
  2. Lending Is a Business of Persuasion
  3. One Builds, One Manages, One Sells
  4. Debits and Credits Don’t Change
  5. It Became Exciting for Everybody
  6. In one Word, It’s ‘Scale’

In the middle of this episode, I was trying to remember Victor Kiam‘s name…


Read the best-effort transcript below (This technology is still not as good as they say it is…):

Michael Waitze 0:09
Hi, this is Michael Waitze. And welcome back to India GameChanger. Today we are joined by Rahul Jain, a co-Founder of AllCloud. Rahul, How are you doing today? Thank you so much for doing this, by the way.

Rahul Jain 0:23
Thank you. And I’m fantastic. I am very happy that I’m speaking to you today. Thank you for calling me.

Michael Waitze 0:30
Oh, it’s my pleasure. And look, I said this to you before we started recording, nothing makes me happier than a guy with a killer microphone. You just you sound great. Thank you. I feel like I need to upgrade my equipment just to keep up with you. Anyway, it’s great to have you here. Before we get to the main part of our conversation, can you please give our listeners a little bit of your background for some context.

Rahul Jain 0:53
I’m an MBA grad. And I come from a family business background. So before starting AllCloud, I was managing my family business. And then AllCloud happened after doing my MBA, I’m a commerce student. So that’s what I understand much better than anything else, I think of business, and how things flow in business. And when this opportunity came by I was I was kind of ready in terms of taking on and and one thing fell into another. And here we are today. AllCloud is an eight year old company doing good.

Michael Waitze 1:31
So tell me a little bit more about the family business. I’m always interested about somebody who goes into the family business, and then says to mom and dad and the brothers and sisters, I’m out. I’m gonna go do something else. So what kind of business was your family? And was it finance related? Or was it manufacturing related? What was it what was involved in?

Rahul Jain 1:48
It was finance related? It was lending, lending to automobiles, okay. And that’s been the family business for a long, long time. And when I started, I started scaling up the business to different geographies within the city I am. So on the face of the city, we started putting up our shops. And also one day I felt that Okay, now this is not happening because I need to be in four different places. Every week, it’s to manage it. And I can’t keep an eye because it’s money, it is cash. You know, you need to have great oversight on each transaction. Right? Right. So then, other technologies needed, started building something. Then when I met my co founders were doing the same kind of same stuff. They actually approached me as a client. And then while I didn’t buy the software, but I kind of Biden, I kind of purchased the idea in terms of getting on board with them. And we started slowly started building in I was part time working at the family business and part time working at AllCloud. But then things started becoming more exciting here. We started getting clients in, the product became much better, then then I moved full time. So it was like two days, three days, three and a half days, four days, five days, not seven days, eight days a week.

Michael Waitze 3:16
It takes a week. I like this. I want to find something before I make up before I make a comment on this because there was a guy, I think in the 1970s or 1980s. And I’m just trying to remember, like exactly who it was. So just give me a second as I get this guy’s name. Right. I think it was Victor came in, but I want to be sure about this. But he said something very similar to you. He was like, he wasn’t approached by the founders. But he said, I use the product. And I liked the company so much. I bought it. I can’t remember the guys name. But I think it was for Gillette razors. He said, I liked the company. I liked the product so much. I went out and I bought the company and it kind of sounds like the same thing. It’s your family’s been in the lending business for a while you were trying to build your own technology because you’re like, Dad, I cannot be in 16 places at one time. It’s just not gonna work. Right? So we need to have some tech here. And they found you because they were thinking, well, we this is a gigantic potential opportunity for us. And you’re like, yeah, actually, it’s so big. I’m not gonna buy it. But I’m gonna join it and build it. Does that makes sense?

Rahul Jain 4:14
Yeah, that’s exactly what happened. So I think when we, when we started talking about it, we felt that yeah, this is a great team because I, well, I don’t understand tech. I can’t write a line of code myself, but my co founders can. And what I can bring to the table is probably the understanding of business. And well, they also have a great understanding of how businesses work because all of us are from family businesses. Then they did engineering and I did commerce. So kind of balances out the team. One builds, one manages and one sells. That’s what we started out as and I think that was the primary functions we thought a business should be able to do Run by itself. But then yeah, just delay and as you go one step at a time to understand that there are a lot of things. So then it was a learning curve for all three of us. Yeah,

Michael Waitze 5:11
this sounds like a classic story of dogfooding. Right? Like, you know, you need this product, you know, what the product is supposed to? Do? You know, how the lending business works? What was it like coming out of the family business, jumping into a brand new business, and then trying to figure out in the context of the competitive landscape in India, right, which is a massive country, very competitive to build something from scratch? What did you learn about being a great entrepreneur that says, we’re going to explode out of this environment? And just get so big that we’re gonna get discovered by everybody? Do you know what I mean?

Rahul Jain 5:46
Yeah, so I think it was the feeling that if I was having a problem with technology, technology, not being able to help me scale, or V, then thought that it is a problem that everybody has, yeah. And nobody wants to work on technology. Everybody wants to work on business, right? They want to spend more time growing, scaling, optimizing, and increasing revenue. Yeah. And technology as a function should be an enabler. That’s what we firmly believe that technology is for scale technology is for enabling growth. And then we thought that this is something that could be replicatable. And that’s where we started out as a SAS. So when I did not understand what SAS was at all, when we started, I was I was completely away from technology. And thankfully, you know, my team, my co founders were very clear that this technology can be scaled, if it’s built on a SAS, and they did great stuff in their earlier career. So you know, it was from Infosys, Ashish, from Deloitte. And he’d seen all of this stuff happening, right? Right. How what says data recovery, what’s Cloud Data Management was security is our process or a product needs to be delivered. So it all put together I think, we thought that if it’s put on a SaaS model, where people pay as they grow, this is an immense potential immense opportunity that we can scale with so many people. And as we grew, we understood that okay, the business of money is same. Whether it’s in Hyderabad, or across India, or now across the world. I think it’s it’s same, it’s a debit and a credit, debit and credit don’t change, right? It’s across the world.

Michael Waitze 7:42
Exactly. I want to understand this other aspect and a little bit more detail. So if you didn’t understand technology, I have to guess that your family was one step further away as well than you are. So when you go to them and say, We need to technologized this business, but we need to do it in a way that’s useful, not just for us, but for everybody else. I’m curious what those conversations were, like, you know, around the proverbial dinner table?

Rahul Jain 8:12
Well, initially, they’re a little difficult. But then, I think, if long as you see an opportunity, you things, see things falling in place. And then you get little acceptance. And then we started doing this, when we hired more people, we had more customers, it became exciting for everybody.

Michael Waitze 8:34
You had said to me, you couldn’t be in four places. I mean, I exaggerated and said 17, or 16, it doesn’t really matter. But you were building out locations, right? In individual places to go there. I presume that the people to whom you’re lending were coming into your locations, almost as if they were like a branch. It’s my feeling that yeah, it’s my feeling right? That these branches kind of never go away. Because people want to interact with people. The tech gives you the scale, but how do you combine the physical branches with the technology that you’re using to create something that actually can scale?

Rahul Jain 9:06
What you need to do is you need to make this physical transaction digital for scale. Okay, you entirely remove the touch and feel or I would say the conversation out of a business. But how do you take this conversation to a digital meet, where you can extract data analysis, and then build on it. So even today, what we’re doing at AllCloud is working with our customers on the physical approach as we champion we tell when we talk to them and car digital is good. Digital is good for that set of populations already on boarded. And you know, they buy into the idea that, you know, they are using a mobile phone, they want to transact anything on the digital platform. But there’s an immense and large population that still is not entirely on the mobile or they still need assistance in terms of getting on boarded. And their businesses are not all digital. So they are credit invisible in a certain way that transactions cannot be extracted from a data source, but have to be understood. That’s where the physical to digital, you know, the pipe has to be created. And so that’s what we’ve done. How do you

Michael Waitze 10:21
make that transition, though? Not for you, but for those businesses that you say that aren’t part of the digital infrastructure yet, right? Because this is the real key point. You go into a first tier city, Mumbai, Delhi, Kolkata, all these cities that people have heard of, but once you move into second tier, third tier cities, where everything is mobile first, and then sometimes not even mobile at all, how do you go out to those other cities and other towns and convince other people, even on the lending side, that they need this technology, and then to empower the people that need to get the lending done to use this technology? If that makes sense?

Rahul Jain 10:58
So what we used to do is to tell people that okay, wouldn’t it be great, if you would want to manage your business right from where you’re sitting, or even if you’re on a holiday, you can just log into the application and see how you guys are doing work at the office, right. And that was something that was really, really appreciated. Because just imagine that I don’t need every day, I’m going to this location managing my business, I can’t dream off, you know, not being there for like 10 days or stretch, even if I’m there, I’m calling up every two hours and checking in. But now with our application, you could go anywhere. You could go anywhere, and you’d still have your business on your fingertips.

Michael Waitze 11:39
And this is b2b, right? It’s a b2b or b2c, or both.

Rahul Jain 11:43
Now, it’s a b2b, pure b2b, or b2b enterprise technology company.

Michael Waitze 11:48
Yeah. So but how does this work though, right. So you try it out? I’m guessing right with your family business, which is lending to automobiles, but there’s also and there are multiple types of automobiles, two wheels, three wheels, four wheels, right? trucks, buses, all this kind of stuff. But then there are homes, unsecured loans, all these other things to which you can you can potentially sell this SAS product, how do you branch out into those other things into places where necessarily you didn’t have the experience, but you know, that there’s lending taking place.

Rahul Jain 12:16
So we started out with automobile finance as a product. But then, as we met a lot of people as you met more organized players. So initially, we were working with, you know, small lenders, kind of unorganized. But then we were lucky enough to land in customers who were on the non organized side. And it was not just one product, they had multiple products. So I think the understanding also came from them that they were, they were kind of open enough to accept a young company that is doing great stuff in one product, but they said, Alright, you guys can do this as well. And then we started learning, we started understanding business, and how we can just replicate the model. So today, we have a great steps of product, not just automobile finance, we’ve got personal loan Buy now pay later is, which is the buzzword, we’ve got MSME MSME. It’s a great product that we do today. Microfinance, go loans, prints, also got personal loans, different kinds of term loans, stretching out to loan against properties, and then domain based credit. So if somebody wants to do something unique, they’re more than happy to collaborate with us. And we kind of create the product by simple configurations, adding the domain layer, the understanding that they have, again, physical to digital collect data, put it out in, you know, data visualization formats, for them to recreate and improvise their models as they go.

Michael Waitze 13:47
What is the impact on the businesses? If it’s pure b2b enterprise? Right? What is has been the impact on the businesses that you’ve encouraged and convinced to use your product on their own growth? Right, what have they seen as the impact of having a SAS finance model embedded into their lending products?

Rahul Jain 14:08
Well, I’m thinking one word, its scale. Because we’ve seen customers move from a 3000 odd number loan book to about a 60,000 loan books in about five years. Okay. And, and that’s purely with the same kind of metrics they had on collections. So if the collections were highly efficient at about 96 97%, even at the scale of 60,000, or loans, the collection percentages were same. So again, it’s replication of what you do good. But then do it fast and do it at scale.

Michael Waitze 14:48
So the flip side of that question has to be what is the implication for this new lending? If you go from What did you say 3000 to 60,000. It’s 20 times more, which means that you’re not lending money. to either new borrowers or the same borrowers, but just much more and much faster. What is the impact on the lives of these people that maybe did or did not have access to credit before?

Rahul Jain 15:12
meant, so there is a huge credit gap in the time to try to use it is I’m talking about 2017 18, when it was much more, you know, huge. But with this product, you were able to reach out to those areas there, those cities where the banks were unable to, you know, even penetrate. And then again, the kind of lenders we work early on where were lending to people who are not in the credit for all right, their credit assessment was essentially meeting up the borrower understanding in the conversation, whether he has the intent and the capability to pay back. Right.

Michael Waitze 15:51
So do you guys lean on UPI as a way to distribute these financial products?

Rahul Jain 15:58
Yes, we’ve, we’ve incorporated UPI as one of the channels for collection for our lenders. And we’ve seen that even in digital collections, more than 85% of our collections from the digital channel are coming from UPI. UPI is a fantastic thing. It’s, I think, part breaking in certain terms, for sure.

Michael Waitze 16:17
For sure, I think it was a couple of days ago, or maybe a week ago, right? Lee Hsien Loong, who’s the Prime Minister of Singapore announced that pay now, which is kind of Singapore’s version I believe of UPI is linking up with UPI. And I’m curious what you think the implications of that are going to be as well.

Rahul Jain 16:36
But I think it’s going to be easier for if it replicates to multiple geographies, then for people to also service their bills in India. So if I’m, Molly farms in Singapore, and my family’s back here, if I want to make payments on behalf of them, I can do it. Without any hassle, I can transfer money very easily. I’ve also heard, this is just the start of collaboration between two countries, they’re gonna be many, many countries that are going to be replicating this model, it’s going to be easier for students are going to be traveling from one country to another just to transfer money via UPI, and UCLA, you know, and collaboration at the other end.

Michael Waitze 17:14
Yeah, and here’s why I’m thinking about this. So I was in I was in Singapore in June of last year. And then also in September of last year, you know, I live in Bangkok, right. And here, I almost never use cash anymore. Once I figured out that I could QR code or transfer or use prompt pay, which is essentially UPI in Thailand, for almost anything. I never leave the house, like I don’t even have a credit card that I use. I literally just have my phone with me everywhere. And when I went to Singapore, I couldn’t pay for stuff in my phone. It was so frustrating. It’s nobody’s fault, right? That’s not the point. But it was so frustrating. But now that means that ever does this mean now that every person in India, who has access to UPI can now do the same thing if they travel to Singapore? And then I’m sure it’s going to happen in Thailand as well with prompt pay. Yeah.

Rahul Jain 18:03
I think that’s what’s gonna be. So not. I’m in India, I’m used to doing it, why am I mobile? So if I traveled to Singapore, I’m able to do that. So it’s gonna be a little less disruption. I’m traveling to a different country.

Michael Waitze 18:16
But what does that mean for you now as AllCloud, the in your ability to now take the stuff that you’ve built, and move it to second and third tier cities in places like Thailand, Indonesia, is going to come online at some point in Vietnam and the rest of the region like how’s that going to work?

Rahul Jain 18:32
Learning a learning curve with digital payments is going to be far far more advanced. Because you’re working in India, India is one of the I would say one of the most toughest, it is a country or a market to work very competitive, very advance. So if we are able to do it here, I think the learnings that we take from our work in India will help us be ahead of the curve in terms of delivering the solutions to countries like Thailand, Philippines, Indonesia, anywhere where there is going to be a rise in disrupt payments and collections in the lending space. Yeah.

Michael Waitze 19:10
I always want to understand, like if you build this core business, this core platform business around finance, leveraging UPI, and then you know, other payment systems globally, what other products then will you be able to offer on top of that, or next to the credit products that you’re already offering since you’re part of business’s financial lives, right?

Rahul Jain 19:32
I think our purpose at AllCloud is to further the goals of our lenders. So what we are focusing on is on the asset side of the balance sheet, so when if it’s a large loan, then I think small loan or a micro loan could be an additional product that we can help our customers offer using UPI because that’s going to be very quick and easy. disbursements are going to be built in minutes And that’s what you know, we’ll be able to offer. In fact, we can also break down the repayments into more simpler forms may not be monthly, it could be weekly, it could be daily. If there’s just one a day, because UPI doesn’t come with a charge, right, you can make as many payments as you want, right?

Michael Waitze 20:19
Yeah, I mean, every time I pay for something entirely, there’s no charge. None. It’s amazing to me, just like, here’s my money, boom, it’s even less, it’s less expensive for me to do that, than to actually go to the ATM and take money out of a bank, a bank’s ATM machine. That’s not my bank. Right? Yeah, so I just wonder what’s gonna happen to all this stuff.

Rahul Jain 20:39
I think people are gonna get used to it. And it’s, it’s gonna be far live as cash was. So you know, five years down the line, you couldn’t imagine moving out without a wallet, and some cash in it. And I think the phone is gonna be the same. Yeah, I agree, hey, you just can’t lead.

Michael Waitze 20:58
If you have all this information flowing through your system, and if you’ve taken companies from 3000 to 60,000, in their credit book, you and they must be gathering a ton of data. Right? So what are the challenges on building a data and data analysis infrastructure for you in the team? That’s the first thing but the second thing is, what are the benefits to having all this data? And then how do you spin it around and say, we have even more data for you. So you can actually make even better credit decisions as lenders.

Rahul Jain 21:30
As well, once you get this data all organized into digital format, then it’s very easy to understand the trend. And that’s what we’re doing now. So I think the first part is to get digital, and then digitalization of your process. So that’s what has already happened. Now there is a time for digital transformation, which means that you have the data, you have the analysis, now you can identify trends, and make more informed, in fact, the product can help you make more informed decisions by assisting your team in terms of analyzing the borrower. So that’s what we are doing now we are analyzing collection data patterns and working with our customers specifically with data data set, because what we believe is that lending is a business of persuasion. And if you’re able to collect data from a set of borrowers, and probably your competitors not, and you’re doing something very, very unique, right? And then that’s something that you should build on. So we use we work with them, or we’ll help them understand it or put it into machine models. And now we’re giving them success. So scores on such data. Do

Michael Waitze 22:40
you see epiphany moments in these companies that haven’t been digital before? Where you give them access to all this data, and they start making credit decisions based on that data that you give them? And that you can see it in their eyes? And they say, oh, wait a second. Now we can do this. And we didn’t think we could before. But now we can. Do you know what I mean?

Rahul Jain 22:56
I think that that’s kind of a eureka moment for them as well. Right now? Yeah, it is it is? Because I mean, it’s always there. They know it, but it’s not in front of them. What does that mean? Always there? From they know, they know the kind of borrowers they’re working with, they know, by looking at it, you know, a credit profile, okay, this is going to be good for us. But then, if you reinforce them, our dream was this again, you know, in a model in a in a representation, then they’re like, Okay, we knew it. But now this validates what we’ve always been doing.

Michael Waitze 23:36
Yeah. Do you? Do you see a generational difference in the understanding of how to use this digital technology, right. So in a similar way to the way, you know, you told the previous generation of your family business, hey, we need to digitalize Do you see the same thing in the businesses and in with which you’re interacting as well?

Rahul Jain 23:55
Yes, there is a there is a great acceptance of technology. And people have come to realize that people who are doing well in this or any business, they have used in leverage technology to their advantage. In fact, when you said generational change, or this more happens when you know there is a change of guard, the old guard retires and when the new guard comes, the new guys come in. Okay, now, we’re going to be working like this, because they’ve not been used to. So if I’m, I’ve been used to using an iPhone, all my life, right? And you want me to use an MS DOS based application that takes like ages to generate any mis data. I certainly would not have the patience to wait. And then that’s where it kicks in. I said no. Now we need transformation. We need to change or we need to upgrade our technology. So yeah, we’re there. If somebody wants to use an iPhone in terms of learning technology, we’re already there.

Michael Waitze 24:51
Did you ever use an MS DOS application? I cannot believe you did.

Rahul Jain 24:57
I know I haven’t used an MS. DOS based application for work. But I kind of used a little, I think Visual FoxPro, something like that when I was working. Yeah, I did. I did. And it was it used to work fine. So then always I say, No, this is not for me, this is not going to help me move. But I’ve seen customers build great loan books on an MS DOS application. And I was like, hi, guys, how do you manage this is not the this is ancient notic.

Michael Waitze 25:30
Look, I mean, I’ll tell you, my first applications were all MS DOS based, right. And even some of the first spreadsheet applications like lotus, 123 and VisiCalc. Were all DOS based. So it’s just interesting to me that you would actually even know that or bring that up.

Rahul Jain 25:46
Technology was there in some form or shape. Yeah, and but then, people don’t change the business tech. So often, they kind of stick onto it. Because there’s a lot of change management required, nobody likes to change, or move from one comfort zone to a zone that they will take time to get comfortable to. So I think that’s why people stick on to legacy applications. I think it’s even not just with small players, it’s also with large players, because the magnitude of problem is is huge there, because a lot of people have been used to this comfort zone. But to move away from that. It takes a top down approach where the leadership needs to be kind of very certain that they have to do this.

Michael Waitze 26:36
What are your biggest enablers to growth as a company? People, people? Interesting,

Rahul Jain 26:42
so you always know. So when we started out, we were three plus five people. And then when we reach 20, we’re like, wow, you’re doing something good. And then the aspiration was always that, okay, we need to be a 50 member company. Okay, now, we became 50. And we became 100. Now 125, but then I think the greatest drivers of growth have been the kind of people that we’ve been lucky to have on boarded, as team members, as our people in AllCloud and their understanding of our business because our more than 35% of our people, even today, in AllCloud are more than four years are with us. So we will understand, believe in what we’re doing. And that also replicates in the kind of work we do our people understand domain very well, they have taken up this attitude to be more consultative and approach. So we don’t do anything just because we have to do it across AllCloud, it’s, it’s that we kind of think over it, we debate ideas, whether it is good for the product, good for the customer, good for AllCloud or not. And then if there’s a if there’s a go ahead from multiple stakeholders, only then things go into the product or as part of our project.

Michael Waitze 28:10
As you grow from three people to five people to 25 to 50 to 100 to 150. How do you ensure that the company culture that was there when there were so few people is maintained, when you’re now growing really rapidly?

Rahul Jain 28:28
For us, it’s happened organically, I think, the initial people that were on boarded, kind of kind of glued it on during the culture that we had, then they kind of trickle it down to the new people that we have on boarded. And then But then at a certain point, we felt that, okay, this is not going to be scalable if you do not have a proper HR function in AllCloud. So now we’re doing that we are investing a lot in streamlining operations, making things more system driven, but still retaining, retaining the core values of what AllCloud was always believed in that people, our people are the most important asset for us.

Michael Waitze 29:16
The last thing I’ll ask you, before I let you go is when you go home now and sit around the family dinner table for really, what are they? How are the conversations different? And what are they like now?

Rahul Jain 29:28
So now, I think the conversations are about what we’re doing next. Or what, what’s exciting for me to ask, okay, what’s happened? What’s happening in different geographies? Because now, what we’re working on in all cloud is from going local to global. Right. So there’s a lot of excitement about, you know, me about all cloud, being able to scale from in Hyderabad to India and India to Southeast Asia and Africa. So, those are the conversations that are more interesting for everybody because But I’ve never thought in my wildest dreams that I would ever be able to have a business that’s going to be in different geographies.

Michael Waitze 30:10
Right? Do you see yourself moving to another country or another continent? I mean, you mentioned Africa I was gonna let you go but this is so interesting to me right? Because Africa you know, way in a way, right? So just work with me on this for a second in a way is similar to India, right? The whole continent there has one point something billion people similar in size to in population size to India, but also similar in the sense that if I go from one African country to another African country, in the same way that I go from one Indian city or state to another one, it’s almost like a completely different culture, language and food. How big do you think that opportunity is for a company like yours? It’s had to cut its chops in India and then move that model to Africa.

Rahul Jain 30:51
You said it rightly Africa is one word very diverse. Yeah. Right. In they are an uncertain terms, they are quite advanced in terms of money movement, I think M PESA. has been a fantastic, fantastic model, and how our technology or our business can replicate that definitely, as I said early on the language of money, same the business of money, same. Africa has so many people that are underserved. They will move to banking, in the near future. And the technology like ours, lending can be made more efficient, the learnings that we have from the Indian market, which is you know, physical and then digital. That’s what it’s happening there now, so yeah, be very excited about the opportunity opportunities in Africa.

Michael Waitze 31:38
Okay, I’m gonna let you go. That was really great. Rahul Jain, a co-Founder of AllCloud. Thank you for doing this. I really appreciate your time. And I love the dedication to sound quality. That was awesome. Thank you again.

Rahul Jain 31:51
Thank you, and it was a great pleasure speaking to you. Great, thank you.


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