Monthly spending patterns in India typically show a spurt in the first week following pay-day tapering off to a trickle by the end of month.
Monthly spending patterns in India typically show a spurt in the first week following pay-day tapering off to a trickle by the end of month. This happens especially when finances are not managed properly. At the same time, rising purchasing power means that many are unable to keep track of their expenses. Recognising the need to launch an application to give an overview of expenses, in November 2014, Amit Bhor, Anurag Sinha, and Patanjali Somayaji launched Walnut—an SMS-based personal finance tracker to monitor outflow of money.
“All banks are sending SMSs on transactions. If we can build a technology using this then users can get rich insights into their expenses in a safe and secure way,” said Bhor, co-founder and CEO, Walnut. The app does not require the customer to share bank details such as account number or password.
Bhor, who had earlier worked with Google, built a technology to analyse business SMSs and show relevant information to the consumer. Mobile banking apps are more transaction-driven and only help to send money, pay bills, and do not track personal finance, according to the founder. “No other application can show spending on food and drinks, e-commerce shopping, taxi, etc. Walnut extracts this data and such detailed segregation is only possible on Walnut,” Bhor said. In addition to tracking, Walnut also warns the user on exceeding the monthly expenditure limit. For instance, it tracks the credit card bills of the user and sends alert on respective credit limit.
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The demonetisation drive in the country helped Walnut as it doubled its user base from 2.5 million to 5 million in 50 days. In November 2016, Walnut launched a feature called ATMwithCash to help users locate ATMs with cash. The application uses SMS alert of cash withdrawal and phone’s GPS to pinpoint the location of ATM with cash.
“Within two weeks of demonetisation, we launched this feature and the response we get was tremendous. We were ranked 22 on the Google Play Store among all apps in India,” Bhor added.
In August, Walnut forayed into P2P money transfers and launched its bill splitting feature. It allows the user to makes the transaction from one bank account to another without going through a wallet or any third-party app. According to Bhor, transactions through bill splitting rose 10 times post demonetisation. Walnut had partnered with ICICI Bank and Visa for this feature as ICICI Bank has a licence for P2P transfers.
By the end of this month, Walnut will launch its lending service where it will help consumers to raise loans from partner banks. He declined to share the names of the banks but said that it has signed up with three of the top five banks.
“We are piloting multiple business models on the financial services side—lending, investment and insurance. We will start to monetise from these services by Q1 of 2017. Our financial services portfolio will help users make better financial decisions. Since we have a lot of data on the user, we can recommend the right product across different financial verticals,” said Bhor.
Walnut raised its seed round of $1 million from Sequoia Capital in December 2014. Five months later, it mopped up $8 million in Series A funding from SAIF Partners and Sequoia. “Once we start earning revenue from the financial vertical we will be in the market to raise the next round. In Q2 of 2017 we will start looking for Series B funding,” Bhor added.