CREDICAR
When legal professional Amar Rana set out to buy a new performance sportscar he had no idea he was about to embark on a journey that would see him create a FinTech start-up that solves one of the biggest issues facing motor finance. Yet through close collaboration with industry insiders that’s exactly what he has done. SuperTech catches up with Amar and gets the inside track on launching a FinTech startup in one of the most volatile financial periods in recent history.
What was the challenge that you encountered that led you to create CrediCar?
Back in 2018 I had my eye on a Yas Marina Blue M3 BMW with leather interior and sports pack. Cars are my passion and I had done all the relevant research and knew exactly what I wanted to buy and where from. The car was going to cost £80,000 and I knew that I’d need to access finance to purchase it. I went to the dealer’s website and attempted to do two things – firstly, get an accurate finance quote and secondly understand my eligibility with the lenders that worked with that dealer. I found that I couldn’t do either without undergoing a hard credit check. This meant providing all of my details, including my employer’s name and address and having a record of the check on my credit report for up to a year. Given that, at this stage, I wasn’t looking to apply for credit, just checking affordability this seemed incredibly onerous. It was a really bad experience for me as a customer and given all of the barriers involved it was clearly going to lead to fewer sales for the dealer, manufacturer and lender. I felt like there had to be a solution, a way of soft searching to get an accurate quote. I researched the market in the UK, Europe and United States and found that there wasn’t a commercially available way of doing this. It became clear that if I could solve that challenge there was a real opportunity here.
How did you take it to the next level?
Being from a legal background my first point of call was to research the regulatory environment. I quickly found that the Financial Conduct Authority (FCA) had an active investigation looking into how motor finance was being sold that identified consumers were not able to access key information early enough to enable them to make informed decisions. This aligned with my experience and revealed that there was a pain point on the customer and regulatory side. In response to these findings, I went ahead and built a prototype of how an improved customer journey could look. Through the power of LinkedIn, I was then able to reach out to Graham Wheeler, the former CEO of Volkswagen Financial Services. I talked Graham through the prototype and what I was looking to achieve and following a meeting at our offices, which were then in Canary Wharf, he joined CrediCar as a non-exec director, helped us identify further pain points from a lender side that we could help solve and provided us with the added validation of someone who had been running one of the biggest car finance companies in the world backing our technology. Graham was able to introduce us to car dealers where we identified further pain points.
How is the technology disruptive and how do you set yourself out from the competition?
The biggest differentiator for us is that we haven’t approached this with preconceived ideas, based on current processes. I’m not from the industry, so we’ve taken a logical, sector neutral approach. We have competitors, very large competitors from within the industry. However, we’re the ones that are gaining traction with banks, the reason being that we’ve taken a consumer centric rather than dealer or lender centric approach. As result we’ve been able to build a system that creates efficiencies for everyone involved in the process not just one element.
How did Covid19 impact CrediCar’s development?
Initially, we were part of Level39, One Canada Square – a FinTech ecosystem in Canary Wharf. The main reason being that we wanted to find the mentors and advisors needed to help develop our technology and access the banking and finance connections we need to grow – a lot of which we’ve since been able to achieve through SuperTech here in Birmingham. When Covid19 hit it had a profound effect on us. Our prototype was in development, and we’d just started speaking to banks and car dealerships. All of those discussions came to a standstill as dealerships closed down and banks focused on forbearance, helping customers with their repayment plans. It was at that point that my business continuity plans kicked in. We focused on addressing our technical backlog. The result being that we were able to include a lot of the features that are highly valued by lenders and brokers today. In addition, the world became a much smaller place and suddenly I was able to raise money over Zoom and Microsoft Teams. This meant we were able to move back to Birmingham and through SuperTech build out some of the connections with like-minded ProfTech entrepreneurs and financial institutions that we’d initially felt we had to go to London to develop.
How important has SuperTech been to the businesses continued development?
Being involved in SuperTech has been hugely beneficial to us. While the main part of our offering focuses on loan pre-approval, we’re also developing an automated underwriting process using machine learning and artificial intelligence. The SuperTech Serendip® Incubator included two challenges directly related to those two aspects of our technology solution. Through SuperTech we had a direct introduction to the key decision makers at BNP Paribas Personal Finance. After undertaking onsite visits and meetings with the wider team, we got to the heart of the challenges they were facing. Using the CrediCar underwriting models we were able to really break down their data, identify any issues, explain how we could automate the process and outline the return on investment they could expect from using our technology solution. This is an area they were already working on internally, with an aim of achieving 100% automated underwriting by 2025. Through the SuperTech programme we were able to deliver efficiencies of over 90% in credit referrals. Given that it costs approximately £150 pounds to process a customer manually and on average, some of the mainstream banks are declining 100,000 customers a year that’s a £15 million annual loss on declines alone. Now we have the stats and figures to demonstrate that this works within a commercial environment, there’s some real interest from BNP Paribas Personal Finance and other banks in taking this forward. Working on this programme alone has helped accelerate our business by at least 12 months.
SuperTech also introduced us to a programme from the University of Oxford that has allowed us to build up a group of world-class mentors that are helping us to scale the business.
Would you recommend SuperTech and initiatives like the Serendip Incubator to other FinTech entrepreneurs and what advice would you give for getting the most out of these programmes?
Yes definitely. There’s a huge amount of benefit to be had from being involved with a cluster like SuperTech, whether it’s introductions to like-minded entrepreneurs, building connections with established financial and professional services business, or as in our case direct interventions that can help advance your business. To get the most benefit it is about having a full understanding of how your technology solution helps a corporate partner solve a key challenge. Product market fit is incredibly important. Also understanding that there may be challenges in working with programme like the Serendip Incubator. For example, when working with a bank there can be limitations on the data they can make available. Understanding what data you need and being able to adapt to limitations is key. Fortunately, the entrepreneurial mindset means that we will find a way to get to the right solution.
What next for CrediCar?
Last year we went live with the FCA Regulatory Sandbox, integrating three lenders and one car dealer into our system. Since then we’ve onboarded Santander and BNP Paribas Personal Finance, with a further five lenders ready to join. We’re seeing significant and fast traction and growth and interest from France and Spain, which is leading into our latest fundraising approach. The aim for 2023 is to undergo rapid growth, tripling our headcount with the aim of recruiting a further 12 technicians and data scientists.
For more on CrediCar and their work: https://credicar.co.uk/
To find out more about working with SuperTech and how it can support your business contact executive lead Hilary Smyth-Allen at hilary@supertechwm.com.