For this edition of the Fintech Explorer, I was excited to do an interview with my former Wharton classmate, Hena Mehta. Hena is the co-founder of Basis, a fintech startup in India that creates financial products for Indian women. I see this as a much-needed service in India, and I was excited to learn from Hena in this issue’s Q&A. Enjoy!
Hena, thanks for taking some time to do this Q&A! Could you tell us a little bit about your journey to starting Basis? How did you come up with the idea, and what motivated you to start the company?
In 2016, my dream of getting into one of the world’s top business schools had become a reality! The months leading up to that day were intense - getting together the best version of myself in my essays, career stories, GMAT scores and recommendation letters. I was admitted to the Wharton school for the full time MBA program. But, literally 2 days after I received that acceptance call, it suddenly hit me - how was I going to pay for this? As you know, an MBA program in the US is not cheap. We’re talking over $200K across academic and living expenses. To top this off, there’s the opportunity cost of giving up a monthly income. Basically, this was a huge financial event that I had failed to plan for. I didn’t want to take on a huge education loan because that would destroy my dreams of starting a company post my MBA.
Post returning to India after my MBA, I delved into this space. Why don’t more women take charge of their money? I realized I was far from alone in these challenges. Interacting with over 500 women across urban metros told me that 9 out of 10 women were in the same boat. We’re independent. We’re earning money. We’re choosing to get married - or not. But for some reason, our financial lives take a backseat. I saw a massive gap, and an opportunity to solve a large problem. I teamed up with my childhood friend, and cofounder Dipika Jaikishan - a financial planning expert - and Basis was born.
Basis’ mission is to power financial independence for women. Our vision is to build a full stack set of financial services for the modern Indian woman, to ensure she is equipped with financial services, financial know-how and all the tools she needs to lead a financially independent life.
What does Basis do today? What type of traction have you seen with customers so far?
Over the last couple of years, we’ve focused on building content, communities and financial education tailored towards women. Our app has over 200,000 downloads, and we are now starting to convert these newly informed users into transacting customers with the launch of the Basis Power Card, a payment card designed for women. This is the first card product in India that is being built with a hyperfocus on women’s spending behavior. Women control over 80% of consumer purchase decisions, yet no payment product in the market has designed incentives that work for us. We’ve just launched (by invite only) and are at nearly 1000 activated cards!
Post this, we are planning to layer on other financial services, starting with personal loans, investments, and then health and life insurance. Over the next several years, we are building a full stack digital bank for urban Indian women.
What back-end financial infrastructure have you used for the Basis Power Card? How do you aim to differentiate the card offering vs. other competitors?
Our backend financial infrastructure for the Power Card is built in conjunction with our fintech infrastructure partners which enable us to connect to our card issuing partner (Transcorp International Limited), and the RuPay card network. The experience is fully controlled on the Basis app, with secure cloud servers to store and process user data.
Transactions are enabled on the card with our co-branding partner's (Transcorp) integration with the switch (NPCI which manages RuPay) - which we connect through via our card infrastructure partner. The engine that drives rewards and cashback for our users is based on in-house logic, brand partnerships and BIN integrations.
With the Basis Power Card, our members can expect a first-of-its-kind product, with customised features and curated brand-reward programs - keeping the urban woman at the center of it all.
Indian women see a plethora of offers and deals that often aren’t relevant to their consumption habits or the brand they frequent. Cards have been historically designed for the “traveling male” persona. Basis is challenging that. Consumers today see no shortage of reward programs associated with their spending. However, one that is curated and highly relevant for women - is something that Basis has pioneered.
Basis has partnered with over 25 (and counting) women-led, women-focused brands across personal care, intimate care, beauty, healthcare, upskilling, lifestyle, baby products, and more. Power Card rewards are gamified, making the experience delightful and one that makes you come back for more.
Could you speak a bit about the unique financial challenges women face in India?
First, social conditioning has made women believe that money is not “feminine”, and that men in their lives will take care of money matters. - whether it’s a father, brother, partner - or son. There’s a lot of unlearning we need to do.
Second, existing financial services - whether legacy or new-age fintech platforms - don’t speak to, or build for women. Finserv has defaulted to a one-size-fits-all-men, possibly because men have historically been the owners of wealth - or because of blindspots that are preventing the industry from focusing on segments of the population that are not like the ones building these services and products. As a result, women are not adopting financial services in the proportions they need to. Money works differently for women since our income patterns look different from those of men, we have higher personal and healthcare costs, look at risk differently, and live longer than our male peers. 90% of Indian women will have to manage money on their own - at some point in their lives. I often talk about the 4 Ds: divorce, death, debt and disasters - events that disproportionately affect women financially.
Beyond how products are designed, there are also systemic issues in the ecosystem that make financial services inaccessible to women. Getting a loan or a credit card is often impossible without a male co-signer. Banks call husbands and fathers (and in-laws at times) if a woman’s EMI is due. There is a complete lack of financial privacy for a woman. If a couple approaches a financial planner or investment advisor, he (it’s more often a he) will speak to and address the man only.
Having worked in both the U.S. and India, how have you found the Indian startup scene similar or different to the startup scene in the Bay Area/US?
I haven’t worked at a startup in the US, but if I were to guess - it would be far less chaotic when compared to India :) India is chaotic in general - and building a startup here adds to the chaos.
One of the reasons I moved back to India to build - is that there are more problems to solve here. There is also a good amount of “reverse brain drain” happening - with many folks from the Bay Area/US moving back to India to build, and so culturally we have absorbed a lot of good things from the West. The Indian startup scene is, of course, far more nascent compared to the US. VC as an industry is just around 12-15 years old.
From a hiring and talent standpoint, I’d say until India sees a few solid exits, the concept of ESOPs is still quite theoretical. So even as an early stage startup, we’ve had to offer market salaries (cash). That is changing as the startup ecosystem is maturing and potential employees see the value of owning equity - and foregoing some cash early on in lieu of stock options.
What is on your product and company roadmap for the next 12-18 months? What are you most excited about on that roadmap?
As mentioned, we’ve just launched The Power Card, a prepaid card with curated rewards for women, no fees, and up to 1% cashback on transactions. In a few weeks, card members will also be able to apply for personal loans (or “power-ups”), which Basis is offering in conjunction with our NBFC partners.
With the card, we will integrate seamlessly into the daily (and busy) lives of our users, gain insights on income and spending patterns and then offer other curated financial services across loans, investments and insurance - thereby driving high LTV.