“Save Now, Buy Later”: Interview with Paddy Raghavan, Co-founder and CEO, Multipl

By Puja Sharma

Multipl is a FinTech platform that helps people set financial goals and achieve them by investing in financial instruments that give better returns than savings accounts. It is the opposite of the BNPL model that enables millennials and Gen. Z Indians to plan now and buy smarter.

Paddy Raghavan, Co-founder, and CEO, of Multipl, is a serial entrepreneur with a passion for new business ideas and transforming those into unique ventures and products. He sees entrepreneurship as a means to create something of lasting value. He brings years of leadership experience and key learnings to Multipl and hopes to position the ‘Save Now, Buy Later’ business enterprise at the top globally. He started his entrepreneurial journey with Cmpute.io, a cloud cost optimisation product firm he co-founded with Jags Raghavan.

IBS Intelligence sat down with Raghavan to understand how Multipl is helping millennials set their financial goals with Save Now, Buy Later.

How Is Multipl different from the BNPL model?

The Buy Now Pay Later (BNPL) approach is essentially opposed to the Multipl concept, which is built on Save Now Buy Later (SNBL). Multipl places an emphasis on scheduled expenditure and savings. The SNBL model, which Multipl pioneered, encourages users to save for anticipated expenses such as weddings, vacations, and other planned expenses. The emphasis is on planned spending, developing a savings habit, and reinforcing positive behaviour. The main focus is on planning, using short and long-term goals as the fruit to make savings a habit, and moving beyond the transactional relationship of putting money in and forgetting about it.

On the other hand, the emphasis in BNPL is on obtaining credit and receiving satisfaction right away. Credit lines are offered for the instant purchase of gadgets, jewellery and other items. In absence of a savings plan, this could result in people falling into a debt trap, hurt credit scores and low savings, which does not leave much for emergencies. Interest rates are high and could push folks into a debt trap if they are unable to make the repayments on time.

What is its product offering?

Multipl’s main premise lies in making savings a habit. It aims at offering incentives via tie-ups with brands. It works on a few models, including Brand Saver, where it partners with brands and users directly save with these brands for future spending. The Market Saver model allows users to invest money in curated market instruments such as mutual funds, and tag them to the brands to avail returns from the market and exclusive discounts from brands.

In essence, Multipl is a Sebi-registered investment advisor. It enables users to invest in curated mutual funds, that are personalized to them. The user saves using SIPs or lumpsum payments. This simplifies investing to get higher risk-adjusted returns and is highly tailored to users’ profiles and goals.  You can ‘tag’ merchants and allow them to give discounts, which are given when you buy the product. However, since the money sits in a mutual fund, you are free to buy from a third party altogether or not buy at all. This means that users do not have to face buyers’ regret. Multipl distributes user cash based on a custom risk modelling profile created for each user. It also permits you to save money directly with the merchant concerned and avail discounts.

How are you personalising investment for millennials?

Savings involves making monotonous transactional payments into a bank account or a fixed deposit/SIP. Savings appears to be a dull, counterintuitive activity outside of the small window, unlike BNPL with its rewards and several offers. Multipl makes saving exciting with its brand alliances and investment strategies. Saving money for anticipated expenses is now as simple to do over the phone as using BNPL models.

What are the challenges in the BNPL market?

BNPL has been successful because it offers credit lines to almost everyone, without going through the hassles of a credit card application and the checking of credit scores. However, regulatory headwinds are gathering steam and are bound to impact the sector. The RBI has been framing norms on BNPL models and is already imposing some restrictions. Meanwhile, the Chinese loan apps scare has resulted in increased scrutiny of the space. The third big challenge it faces is the bad debt problem since the model prioritises instant gratification and often results in individuals falling into a debt trap.

Please elaborate on how “SNBL is the future of the FinTech space.”

SNBL is a newcomer in the FinTech industry, but it has the potential to grow as large as BNPL and offer several services. This due course can be done by SNBL vendors creating a marketplace, where certain products are sold exclusively, making the merchant the direct entry point for the user to the brand. The vendors can leverage data points garnered and offer targeted marketing solutions, and discounts to the users.  For the end user, it will not only build a healthy habit but will help them get bigger returns from small investments, to meet a specific goal. Considering it reinforces positive behaviour and does not lead users to debt traps to make money, it is also less likely to be caught in regulatory crosshairs.