Data is (the new) Oil (Mukesh Ambani, 2017)

In the internet age, most digital businesses have come to live that. They create, analyze and use data as their fuel.

For financial services (FS), it has always been so, though. Access to (and usage of) proprietary data has been the key reason for big initial success. We have seen 3 models thereof.

1. Enterprise inherited – Your parent’s an enterprise; you start your business on it. GE, Mahindra, L& T, Hero, etc., not only gave their earnings as equity but also their ecosystems to their FS counterparts. Capital intensive but highly defensible and profitable at the outset.
2. Transactions led – Your business owns the transactions, and you layer FS on top. Most payment companies of today – PayTm, BharatPe, the mPOS guys, etc. One may have to build through losses, but a great model when in full flight.
3. Services led – You get the customer hooked to you for related financial service and then lend to them – Cred, all the wealth managers, etc. Creates higher engagement but takes more time.

The data moat that we chose at Oxyzo is supply chain; we do/ facilitate the commerce of raw materials. Since commerce inherently made (more) money and was higher on engagement, it was fast, efficient and capital-light. + This oil is neither rare nor rarefying.

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