COVID-19 Silver Lining: Rise of Platform-based Businesses

COVID-19 Silver Lining: Rise of Platform-based Businesses

By Subrina Shrestha

"The rise of platform-based services amidst the COVID pandemic is a trend that is likely to stay well into the future in the Nepali market."

The advent of FinTech era in Nepal can be imputed to the successful launch of eSewa in 2009, a mobile wallet that aimed to digitally solve the issue of utility and vendor payments. With this, e-commerce in the nation took its initial steps followed by the uprise of companies such as Sastodeal (an ecommerce platform), Foodmandu (a food delivery platform) and the already existing shared economy players such as Hamrobazar (a free classified platform), mucha.com & thamel.com (gifting platform). 

Post the 2015 Earthquake, two young enterprising minds, Mr. Yurop Shrestha and Mr. Tenzing Doleck, well immersed in their respective line of businesses, observed a gap in the insurance sector and a silver lining in amidst the crisis where insurance coverage and claims were only a fraction of the total damage (life & infrastructure) incurred during the earthquake. The growing global wave of FinTech at that time shed a strong light on the potential of technology to bridge the existing gap in Nepal’s insurance sector leading the two friends to launch E-beema. 

Ebeema is an online insurance platform that enables customers to choose amongst different policies from different insurance companies and initiate a purchase, renewal, endorsement and claim filing remotely at the convenience of their homes. Today the platform has partnership with seven of the leading insurance companies in Nepal with product offering ranging from life, vehicle, home and other (health, travel, etc.) insurance.

In 2018, Phoenix Capital Private Limited (PCPL), the company behind Ebeema, raised a Seed round from True North Associates, a Nepal based private equity and venture capital firm. With the injection of new funds, PCPL aggressively upgraded its technological capabilities and partnerships while also going on to launch an additional FinTech vertical Karjabazar in 2019. Karjabazar offered a digital marketplace for retail loans, allowing users to compare interest rates, check their eligibility and also initiate application process. Expanding on its innovative drive, Karjabazar also developed a credit scoring algorithm for individual borrowers which would in turn provide information on the creditworthiness of the borrower to its partner banks.  However, Mr. Shrestha opined that Karja Bazar might have been too early for the market but nevertheless has been persistent to see its adoption and growth in the local market context. 

The silver lining from pandemic seems to be the encouragement customers have shown towards learning, adopting and adapting to the usage of platform-based services moving away from traditional in-person transactions. From small neighborhood grocery stores going online to bank staffs working from home, the digital way of providing and availing services finally appears to be moving in a positive direction. As the saying goes, “In the midst of every crisis, lies great opportunity”, Mr. Shrestha in a webinar organized by OTW on COVID-19 MSME Fund, pointed out that the rise of platform-based services amidst the COVID pandemic is a trend that is likely to stay well into the future in the Nepali market. 

Although, the multitude of digital tools conveniently available across geographies has created a space for entrepreneurs to quickly test ideas and easily reach customers, it has also ushered an era of overcrowding, compelling businesses to stand out while providing affordable and reliable services. The FinTech wave in Nepal is yet to catch up on the interest its payment vertical has received, however with many FinTech possibilities yet to be explored, sectors such as the insurance, remittance, credit scoring, etc. remain ripe for disruption and PCPL fits well in the FinTech growth trajectory that will hopefully pick up in a post-COVID Nepal. 

Ebeema is an online insurance platform that enables customers to choose amongst different policies from different insurance companies and initiate a purchase, renewal, endorsement and claim filing remotely at the convenience of their homes. Today the platform has partnership with seven of the leading insurance companies in Nepal with product offering ranging from life, vehicle, home and other (health, travel, etc.) insurance.

In 2018, Phoenix Capital Private Limited (PCPL), the company behind Ebeema, raised a Seed round from True North Associates, a Nepal based private equity and venture capital firm. With the injection of new funds, PCPL aggressively upgraded its technological capabilities and partnerships while also going on to launch an additional FinTech vertical Karjabazar in 2019. Karjabazar offered a digital marketplace for retail loans, allowing users to compare interest rates, check their eligibility and also initiate application process. Expanding on its innovative drive, Karjabazar also developed a credit scoring algorithm for individual borrowers which would in turn provide information on the creditworthiness of the borrower to its partner banks.  However, Mr. Shrestha opined that Karja Bazar might have been too early for the market but nevertheless has been persistent to see its adoption and growth in the local market context. 

The silver lining from pandemic seems to be the encouragement customers have shown towards learning, adopting and adapting to the usage of platform-based services moving away from traditional in-person transactions. From small neighborhood grocery stores going online to bank staffs working from home, the digital way of providing and availing services finally appears to be moving in a positive direction. As the saying goes, “In the midst of every crisis, lies great opportunity”, Mr. Shrestha in a webinar organized by OTW on COVID-19 MSME Fund, pointed out that the rise of platform-based services amidst the COVID pandemic is a trend that is likely to stay well into the future in the Nepali market. 

Although, the multitude of digital tools conveniently available across geographies has created a space for entrepreneurs to quickly test ideas and easily reach customers, it has also ushered an era of overcrowding, compelling businesses to stand out while providing affordable and reliable services. The FinTech wave in Nepal is yet to catch up on the interest its payment vertical has received, however with many FinTech possibilities yet to be explored, sectors such as the insurance, remittance, credit scoring, etc. remain ripe for disruption and PCPL fits well in the FinTech growth trajectory that will hopefully pick up in a post-COVID Nepal.