Mayank Tewari and Prerit Srivastava grew up in Kanpur, Uttar Pradesh. Their fathers, who were contemporaries and knew each other, worked as engineers with the Public Works Department (PWD) in the city. But Prerit and Mayank never crossed paths growing up in Kanpur. The two met as batchmates and hostel roommates at IIT-Kharagpur and came to know of their common connections. Soon, they became thick as thieves and made a promise to each other that they would build their own startup one day.
“We thought we would take up jobs after graduating from IIT and then look at doing something together,” says Mayank.
Last year, a decade since that promise, the duo finally fulfilled their long-cherished dream and set up their startup, Streamsource. Headquartered in New York, the blockchain startup also has an Indian offshoot in Gurugram. The startup raised $1 million in funding from venture capital firm Accel in January this year.
By the winter of 2017, Prerit and Mayank had started to get “bored of corporate life” after nearly a decade of it. The two had gotten so wrapped up with work and life that they had almost lost touch after 2015. But, they reconnected again and started spending more time together from October 2017. It was time to set the plan made in college in motion.
They bet on blockchain with the belief that it was changing the tech industry. And, there was merit in that faith.
According to 2019 research by Boston Consulting Group and Hello Tomorrow, a French nonprofit that supports deep technology, the most prominent deep tech fields included advanced materials, artificial intelligence, biotechnology, blockchain, robotics, photonics, electronics, and quantum computing.
German multinational software corporation SAP defines blockchain in simple terms as a “reliable, difficult-to-hack record of transactions – and of who owns what. Blockchain is based on distributed ledger technology, which securely records information across a peer-to-peer network.”
While still with their corporate jobs, they started to work on Streamsource from January 2018, finally launching it in May that year. They started studying the market and talking to the IIT alumni network in the US, picking their brains. The duo soon realised there was a “big gap” and a demand for a decentralised marketplace where data could be shared privately and securely.
They decided to target the unsecured personal loans market in the US and launched their product, Skeps, as a blockchain marketplace where lenders can buy and sell consumer leads in a secure way. The platform allows lenders to collaborate without the dissemination of any confidential information. Borrowers, on the other hand, are also able to maintain complete confidentiality while shopping for the right lender.
The platform also enables multiple loan approvals for the borrower with the click of a single button. For instance, a borrower may apply for a loan from a single lender, but can receive approvals from several vendors.
The business model
The entire unsecured lending market (including credit cards) in the US is worth around $2.5 trillion, making it the largest in the world. Streamsource’s clients include lenders and originators.
In the consumer lending space in the US, originators are aggregators that offer the consumer loan buying options in a format similar to what PolicyBazaar does in the insurance buying space in India. For every successful loan from the Skeps platform, Streamsource charges a percentage from either the lender or the originator.
On the originator side, the company is working in two specific segments: healthcare and home renovation. In the US, there are online aggregators where one can apply for loans for surgeries and home renovations. The startup currently helps disburse around $2.5 million worth of loans every month.
As far as competition is concerned, Mayank says currently there is none. The company has filed patents in the US to ensure intellectual property (IP) protection.
“Blockchain is still a new technology. Any competition that comes in will have to build multiple layers to make it user-productive or friendly. We easily have 9-10 months headway,” says Mayank.
The early days
When the two friends started out together they just had two people working with them – a frontend developer and a backend developer. “But they were really smart people. We hired them through our network from IIT-Delhi and BITS Pilani,” adds Mayank.
The company was bootstrapped till it raised the Accel funding in January and had just four employees. It managed to turn revenue-positive in four months. “At an India-operations level, we are break even, even profitable. And, all this happened in four months,” says the 33-year old former Uber executive.
Interestingly, Prerit, also 33, had a stint with Uber rival, Ola. Prerit had co-founded Chennai-based Qarth Technologies, which was acquired by Ola in 2016. The Chennai startup had developed a mobile payments app called X-Pay that was merged into Ola Money post the acquisition.
Mayank, who has an MBA from the Indian School of Business also had a brush with entrepreneurship before Streamsource. He co-founded reverse logistics startup Agilo Logistics between his stints at Paytm and Uber. The startup shut down in early 2016 due to adverse market conditions, after which Mayank joined Uber as a general manager to take care of the cab aggregator’s new product launches.
The road ahead
Streamsource may look at raising another round of funding in the next couple of months to fuel growth and enter new geographies. The startup has its eyes set on markets such as the UK, Australia, and other developed economies like Europe and Singapore.
The $1 million it raised in January is being deployed towards the company’s spends in India for running its operations, including employee salaries and rent. The current team size of the company is 15. When it went live with its product, there were only five.
From Kanpur to Kharagpur and now The Big Apple, the two friends have surely come a long way.
(Edited by Teja Lele Desai)