BetterPlace is solving challenges in the informal and semi-formal jobs space, Pravin Agarwala

Launched in 2015 to cater to the 45 crore people in the blue-collar sector in India, BetterPlace is a Bengaluru-based tech start-up started by former SAP and Nu Sigma executives. Pravin Agarwala, co-founder and chief executive officer, BetterPlace, tells Ashish K Tiwari, about the venture’s activities in the blue-collar jobs economy thereby bring more people from informal to a formal economy and improving their chances of leading a better life. Edited excerpts...

What's the business of BetterPlace all about?

We run a digital platform aimed at the informal and semi-formal workforce of India. It helps drivers, maids, housekeeping, security guards and delivery boys among others to get skilled, employed and become a part of financial inclusion. The platform provides lifecycle management solutions for the employers, like hiring, digital on-boarding, background verification, skill development, training, assessment and certification, attendance management, compliance management, financial services and healthcare to employees as well as exit management.

There are around 45 crore people in the informal or semi-formal workforce across verticals in India. If we look at the current spending on various business to business to consumer (B2B2C) or business to consumer (B2C) space, we are talking about a market size upwards of $12 billion, growing at 10 – 12% annually. 

Tell us about your client base. How many people are currently on your tech platform?

We have partnered large employers like top e-commerce companies, taxi aggregators, logistics, security agencies, facility management companies, IT/ITES, home service providers, manufacturing, pharma, and pre-schools. BetterPlace is currently working with more than 1,000 enterprises across India with the top three to five market leaders in each vertical as our customers. We have on-boarded 70 lakh individuals, making BetterPlace the largest blue-collar focused tech platform in the country. On a daily basis, close to 10,000 people are getting added and we are aiming to bring 15 crore workers into the formal economy over the next 4-5 years. For our corporate clients, we bring everything under one roof through technology and become the one-stop solution for all their requirements. This is our USP, which helps them with cost saving to the tune of 60% and operational excellence.

How does your platform help its users?

The biggest challenges with the workforce are low skills, high migration in search of sustainable jobs and access to services. These challenges don’t serve as an incentive for companies to invest in providing an upward migration path for these individuals. As a result, this section of our workforce is constantly moving from job to job without any material increment in quality of life. Even our traditional banking system excludes a majority of such workforce as they lack credit history. 

Take a basic example of attendance management. In most companies, a physical roaster is maintained for jobs like security or delivery, the physical register is tallied for calculating the number of days they have worked. You will be surprised to know that this process of closing the attendance stretches till the 15th of the month and their salaries come after it has been tallied. But the workers have to pay their rent, send money home and meet their daily expenses in the first week of the month. They eventually take loans of small amounts like Rs 5,000 and end up paying hefty interest. By the time their salary comes, they settle the loan; they are hardly left with any savings.

Our attendance app helps makes attendance management real-time and transparent, thus expediting the payroll process, not just for the employees, but also help manage receivables better by streamlining client invoicing in industries that supply manpower like security guarding, housekeeping, etc. Now if a client adds the payroll solutions, it becomes even more compelling because now via the platform partners can extend loans and insurance to the individuals at nominal rates based on our trust score, and they can also remit money back to their families in their native with a click of a button on our digital wallet.

What challenges did you face while launching the venture?

This industry is not just unorganised and massively fragmented but has low adoption of technology. Less than 1% of the population have a digital footprint. In the initial days, we used to be surprised when companies told us that they don’t really know how many employees they have and who they are. We soon realised what they were trying to tell us; it is a long manual process to reconcile distributed sets of data sitting on physical documents. It would take weeks to months. Solving issues of massive scale across distributed setup of operations are some of the key challenges our platform addresses. 

How much have you raised in the business so far?

We have raised over $6 million as equity money in total from investors including 3one4 Capital, Unitus Ventures and Neeraj Arora backed Venture Highway as of December 2018. Early investors include Lalitesh Katragadda, ex-Google senior executive and pioneer of online maps in India.

How difficult was fundraising for your business?

In the initial stage, we had to tell our story and convince our investors on the massive business opportunity. I think the market is much more matured and we see amazing traction towards the next billion opportunities now. This is also a result of unprecedented growth we have shown in the last couple of years.

For what purpose was the external funding raised?

As a start-up, we are focused on cutting edge technology, seamless solutions, being ready for massive scale and of course business growth. Most of our investments are aligned to achieve that. We invest heavily in machine learning (ML) and data mining to read insights and create business patterns. We also believe the world is changing rapidly and hence spend a large amount of sum in futuristic solutions like augmented- and virtual reality-based vernacular training etc. Scale for next billion Indians can be achieved with strong tech and simple user experience, that’s another area of focus. We have been expanding our business rapidly over the last couple of years and that will continue to see growth and investment in the next 3-5 years.

Which markets in India are you operating in? Any plans to launch overseas?

Being a technology platform we are vertical/ location agnostic and have been working with customers from across India. Our corporate head office is in Bangalore and sales offices in NCR and we recently forayed in Hyderabad. We will be opening offices in Mumbai, Pune and Chennai this year while expanding the engineering team by 200%. For our overseas expansion, we are specifically looking at geographies that have significant Indian blue-collar workforces like the South East and Gulf countries.

Are there similar businesses already operational in the country?

We see multiple players offering solutions around HR, training, fintech etc. Nevertheless, most of the solutions are looking at solving one single problem. We believe a bigger pain is the friction across solutions and ecosystem. Hence a data-driven platform-providing solution across the verticals is the way to go. We have pioneered that and have been seeing huge success so far. We also believe in early collaboration with market leaders and hence don’t see others as competition, but partners.

What are the costs associated with availing services/ offerings from BetterPlace?

Our focus is on people, creating value for everyone in the ecosystem and building a win-win situation. Due to the usage of tech and new business models we have been able to create a far more efficient system. While we don’t charge our end user anything, in fact, we help them earn more, we do charge our B2B customers. It depends on the solutions used and the cost could vary from $5 to $100 per person.

How are job seekers benefiting from your tech platform?

Recently, we did a survey across thousands of people and found that as a job seeker there are factors like salary, saving, location, social network and skills, become important decision criterion to take the job and stay into it. Through the platform and in partnership with our employers, we create demand projection, skills required, content to get skilled and find the aspirational job in the right location. We help people learn continuously and achieve higher incomes as they go along. We also help connect the dots to solve last mile problems e.g., if I am aspiring to be a delivery boy but don’t have a bike, we ensure that the individual either gets the bike or money to buy the bike. The idea is to help in every walk of the life cycle. 

How challenging was it to onboard the informal sector workforce?  

Yes, there are challenges in onboarding. We do work towards building a large network of existing touch points to address that. Nevertheless, it all boils down to trust. If we create value for people, they would trust us, and the system would work by itself. 

When will your business become profitable?

We strongly believe in a sustainable business model and do have a positive unit economics. Having said that, we invest heavily in future growth and technology. We will be generating positive cash by 2020.

Are you planning to raise additional funding?

We are in discussion with couple of investors to fuel our ongoing growth multifold. We can’t share concrete details at this stage but our existing investors and Board is helping us in the process.

What kind of growth have you witnessed since inception and where do you see it going in the next couple of years?

We have grown from couple of thousand profiles to more than two lakh profiles per month, from five lakh total profiles to over 70 lakh profiles in last couple of years coupled with a 25x growth in revenue. We have increased our customer footprints from one product and few customers to over 1,000 customers addressing multiple needs. We are confident the growth will continue at an accelerated pace. We would like to cater to two crore people in next 15-18 months with 10x growth in adoption and revenue. 

What are your business / services expansion plans and timelines for achieving the same?

We have been focusing on B2B offerings and continue to expand on the same from managed services to payroll encompassing complete life cycle management (HR) solutions. This year would also see launch of our product offerings addressing the financial, health and other needs of our user base. We believe we need to help people meet their aspirations and move up the ladder and all the solutions in B2C would be designed towards that.

What are your expectations from the upcoming Interim Budget?

A simplified tax would be a great. I think the ongoing proposal around angel tax would solve the teething issues. Perhaps a simplified version of reporting for early stage start-ups would be brilliant as the focus could be on innovation. I also believe a relook into minimum wages for large masses linking that to skills would be a boon for the society.