“I spoke to a couple of Fable’s clients to find out what gives them the confidence to select Fable versus any large supplier. But, actually, there isn't a larger supplier of this kind of software. It is a niche market and anybody else will find it very difficult to replicate Fable’s success,” adds Kacholia. Not surprising that Contractor points out: “We've not lost a single customer in six years.”

Strict anti-laundering and KYC regulations mean that doing business with banks is not easy. “Banks are very cautious about whom they want as their partner. So, the fact that they had nine top banks was good enough for me, and also the valuation at which we invested,” adds Kacholia.

According to the World Bank, India received over $83 billion in remittances in 2020 and which is likely to touch $87 billion in CY21. In the current calendar year, inflows are expected to grow 3% to $89.6 billion. However, Fable is not limiting itself to India but exploring overseas markets. The reasons are two-fold: the humongous size and better margins.

“There are very large corridors of remittances across the world such as the U.S.-Mexico corridor, U.S.-Latin America corridor and within Asia, the remittance corridor from Japan to the rest of Asia and Singapore to the rest of Asia. Besides, the remittance corridors within Europe,” points out Kacholia.

For Contractor, looking beyond Indian shores makes for a stronger business case. “This year, our platform has processed $15-16 billion worth of transactions and it’s not a joke. But the issue with Indian banks is that they don't give you revenue, they give you recognition,” remarks Contractor.

With the recent fund raise, Fable has ramped up its overseas presence with sales personnel based in the U.S., the U.K., the U.A.E., Vietnam, and Kenya. “Our aim is to reverse the current mix and generate 70% of our business overseas and 30% from India. From the funds raised we want to tap the global markets where I'm able to sell the same product for 3-4x of the Indian rate,” explains Contractor.

For instance, the average margin of Fable’s offering in India is 25-40% compared with its average overseas billing. Currently, in India, the company gives its customers the flexibility of paying 50% as a one-time cost and, and balance as annual maintenance charge (AMC). “Without the annuity, the business doesn’t make sense and the important aspect is to be able to actually support the bank as per their requirements,” adds Contractor. The other model is to where clients are billed a higher one-time cost, of which 20% comprises AMC.

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