True Balance, a South Korean Fintech platform, has announced its goal to match its expenses and revenues by the end of this year and list its IPO by 2024.
Backed by investors like Naver, Daesung Private Equity, and SoftBank, the company is growing strong in their business in India. A large uptake of their small-sized loans in the country helped them clock three times growth in terms of generating revenues.
The continuation of such profits will likely result in True Balance attaining a positive EBITDA and break-even by November-December 2021.
Know About True Balance!
True Balance is one of Balancehero Co Ltd’s wholly-owned subsidiaries in Korea and a lending platform providing small-sized loans.
It was founded by Cheolwon ‘Charlie’ Lee in 2014 as an app to aid users in finding their mobile phone balance and get top-up prepaid mobile credit. Eventually, the startup added financial services like online lending to its platform, which later became its core business.
In 2019, they received licensing from the RBI to start lending. Today, they provide small-sized loans mainly to users without credit scores and non-online users. As such, True Balance aims to provide funds to those with limited access to it and generate revenues from the unexplored market.
How Does True Balance’s Business Model Work?
The company disburses small loans starting from Rs. 1,000 all the way to Rs. 60,000 at affordable interest rates.
These products cater to the under-penetrated market of customers without access to credit from banks. As these customers don’t have credit scores, True Balance uses alternative data such as phone transactions and other points to establish the borrower’s creditworthiness.
Financial Highlights to Look into
In the last quarter alone, True Balance has disbursed loans worth more than Rs. 250 crores to over 6.7 million beneficiaries.
They have witnessed a 30% to 50% month-on-month growth despite the payments business sector being adversely affected by the Covid-19 pandemic.
The startup was nearing profitability in 2019, but the pandemic severely affected the country’s financial sector, including True Balance’s growth. The business utilised the time to improve its collection process and other aspects.
In the three months leading to November 2020, they started growing again, reaching a 300% surge. Meanwhile, the company also added a range of new services, including booking tickets, e-commerce, and insurance.
They raised $28 million in November 2020 in the startup’s D-series financing. The participating investors included-
- SoftBank Ventures Asia
- Daesung Private Equity
- Shinhan Capital
In total, the startup has raised $90 million dollars, which will help them reach break-even and profitability.
True Balance’s business venture, aimed at millions of users in India, is all set to break even and achieve profitability. The company experienced a fast-paced 3X growth in November-December 2020 after the brief lull of the pandemic.
This is because there were many customers applying for loans, with the pandemic leaving a negative impact on most gig workers. As a result, one of their loan products- Level up Loan, saw a 1500% growth. Such growth strongly indicates that the company will become EBITDA positive and attain break-even by the end of the year.
With an aim to make finance accessible to users in India, the company also intends to open an IPO listing in India and abroad. After they achieve BEP (break-even point), True Balance has a clear target to open their IPO in 2024. They also expect to double their yearly revenue in 2021 from the $10 million generated in 2020.
In addition, the company having a total staff strength of 200, also intends to ramp up their staff strength in the following year.
True Balance continues to provide funds to the non-online payment, non-credit score users in the country. As the sector doesn’t have much competition, their business is all set to grow further and achieve substantial returns. As such, investing in their IPO, which is set to open sometime in 2024, could be profitable. However, investors will always need to be cautious about their investments and conduct adequate research before investing in equities.
Keep an eye on the Angel One blogs for more updates!
Frequently Asked Questions
- What does the True Balance company offer?
True Balance started out as an app to check mobile phone balance, pay bills, and recharge. Today, their core product entails providing short-term and small-sized loans of Rs. 1,000 to Rs. 60,000 to customers without a credit score.
- When is the True Balance IPO set to open?
The True Balance company has announced that it might open an IPO sometime in 2024. The month or date for the IPO has not been announced yet.
- What is the minimum investment amount for the IPO?
No exact information about the IPO of True Balance is available yet. All we know is that it may open sometime in 2024.