Unearthing #5: HariGaji with CEO and Co-Founder Annamalai Thani
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Having identified the income and cashflow problems faced by construction site workers who find it difficult to keep up with their monthly commitments, the tenacious Annamalai Thani - CEO and Co-Founder of HariGaji - made it his mission to empower people who sit in such demographics with the financial knowledge and tools to learn how they can better manage their financial wellbeing. In this month’s edition of Unearthing, we catch up with VynnHack’s 2021 winner on how he broke out of his traditional consulting role to jump straight into startup life.
How construction site visits led him to discover a real problem
You had a very interesting start to your career. As a graduate in engineering, you went on to work with Mott MacDonald - a global engineering, management and development consultancy - whereby you analysed aviation, digital ventures and infrastructure projects. What a shift going from engineering to wages! Tell us more about your career pre-HariGaji.
As a graduate, I was still exploring different career paths that were available to me and Mott MacDonald allowed me to do just that. My natural inclination towards the commercial aspect of projects drove my movement to different departments to understand what I liked to do and what I didn’t like to do. My experience in Digital Ventures, which is the Corporate Venture Capital division, gave me exposure to reviewing pitch decks and updating financial models which gave me an idea of how the startup world worked. Soon after that, I also gained some management experience where I led an infrastructure project out of Dubai.
You eventually went on to leave a stable job and founding a startup almost immediately after. Share your transition into founding HariGaji and how your previous roles have played its part in setting you up for the big leap.
Having worked in the construction industry, I had a lot of face time with the workforce on site. This was where I first got a sense of the cash flow problems faced by the team on the ground. This was something that resonated with me during every construction site visit and I always wanted to do something about it. This was when I came across a concept called Earned Wage Access, which piqued my interest. I figured that if there was any right time to launch this solution, it had to be during the pandemic.
Launching HariGaji
How long did it take to get from idea inception to launching the platform?
It took between 6-12 months for us to validate and test our MVP before we launched in early 2021.
Who is your target market? Presuming it serves those in the B40 segment and migrant workers who don’t necessarily have access to bank facilities, how has educating this specific demographic been? What are the challenges?
Our target market are sectors that have huge workforces, some of which consist of the B40 segment and migrant workers. In order to educate these specific demographics, we have designed our platform to be very simple, straightforward and localised in their preferred language. Whenever we develop new products, we make sure that our target segment will be comfortable and can easily adapt to the changes.
How many enterprise clients have you secured to date?
We’ve onboarded 25 clients to date and currently have a healthy client pipeline in place.
How do you convince employers to adopt your solution? What has the feedback been from companies about how your service adds value to their business?
Employers are always looking for ways to keep their staff motivated, especially during this pandemic and that’s why they reach out to us. Companies have noticed that our solution helps remove the administrative effort of managing salary advances, which differentiates them in the job market and increases employee retention in the company.
How have you attracted users and grown your company?
We aren’t able to disclose this at this stage.
Congrats on getting into the fifth cohort of MaGIC’s Global Accelerator Programme! How has being part of the programme contributed to your business growth?
It’s been incredibly inspiring and very useful. We’ve received valuable advise on fundraising and structuring our pitch. The mentors in the programme are also very helpful and have gone out of their way to help us through the process.
About the Earned Wage Access space in Malaysia and Southeast Asia
In an article by Deal Street Asia, investors are bullish about the prospect of Earned Wage Access in the Southeast Asian region. What are your predictions for the space in the next 12 months?
I expect this space to heat up in the next 12 months. There is a clear need for this solution in Southeast Asia, so it’s only a matter of time before this becomes the normal way of processing salaries.
As a platform that provides employees with early extra cash free of interest, there's also an opportunity for employees to abuse this privilege by requesting for bigger or more frequent salary advances hence taking on more debt than they can afford. What measures are there in place to avoid such instances?
We currently have protocols in place to limit misuse and track usage trends of our users.
At our core, we are a financial wellness solution and that’s why we push financial education content to our users regularly in order to improve financial literacy. We believe that our solution is better than credit cards because we encourage people to live within their means instead of utilising credit cards or loans which can drive unfavourable behaviours whereby people spend more than they can afford.
What are the pros and cons of allowing employees to choose when they get paid?
Pros: Employees have better control over their personal finances and no longer need to deal with the typical financial stresses associated with monthly payments
Cons: Employees have more autonomy over their income, so they need to be mindful of how they use the additional flexibility that’s made available to them
As a platform that solves HR inefficiencies, how will the role of HR practitioners change?
HR practitioners will no longer need to deal with the additional stresses of processing salary advances (e.g. during festive periods) and will have a platform through which they can control these much more easily. It can also encourage improved engagement between both parties.
According to an interview with the founders of wagely, managing cashflow is the most pressing everyday issue for lower- and middle-income communities. In order to help communities escape the vicious debt cycle, how can companies take a more proactive step towards helping their employees better manage their finances?
I believe that more companies should move away from the traditional monthly pay cycle and move to a flexible pay cycle, be it through Earned Wage Access or other arrangements.
Financial literacy is still low amongst Southeast Asian nations. Why do you think that is? What steps are you taking head on to address this problem through your platform?
I think this is largely because financial content that is available is not being pushed to the right people in the right manner. We hope that by creating our own content and leveraging the expertise of existing parties in the market such as Agensi Kaunseling & Pengurusan Kredit, we are able to help improve the financial literacy of our users. We have also defined our design thesis for the application to be built around financial wellbeing to improve the effectiveness of our product when it comes to tackling financial wellness.
About Branding and Marketing
What has your approach been to branding?
Our branding has always been focused on financial wellbeing and HR, so we do our best to create content surrounding those areas.
How important is branding for your business especially in the early days as a startup?
Branding is very important to us and it’s something we continue to develop as we grow. Currently, we are focused on providing the best level of service for our clients and users, which we believe will increase our brand value and help stave off competition.
What kind of branding and marketing activities have you undertaken?
So far, we’ve explored social media marketing and joined several accelerators to gain knowledge of other marketing channels that we can explore for our business.
What marketing channels have proven most effective for the space that you're in?
Facebook has proven to be the most effective for us.
Founding a startup entails finding yourself
What motivated you to start your company?
Having seen the problems faced by construction site staff on managing cashflow, I was driven to solve the issue especially for the people who are most vulnerable to payday loans and loan sharks.
What have been some of the greatest myths and real truths of being a startup founder?
Greatest myth: Running a startup is glamorous.
Real truth: The idea sounds best before you actually start working on it.
As a non-tech founder running a tech startup, what gaps have you filled internally to ensure that you're receiving the best advice and technical know-how on developing your platform?
Having mentors and friends in the technology field as guides have helped me better understand technical know-how and minimise the number of mistakes I make (and I’ve made plenty) but mistakes are inevitable and part of the journey.
Given that you started a business during a worldwide pandemic, opportunities to meet and suss out applicants have now almost entirely taken place online. What sets good applicants apart - especially those who sign up for a startup with little to no real clue as to what the future holds?
It’s hard, especially at this stage. You’ve just got to trust their answers and ensure that they believe in the product and vision of the company.
What are the biggest challenges you’ve faced and obstacles you’ve overcome? If you had to start over, what would you do differently?
If I were to do things over, I would have focused more on the market rather than the product. I was very excited about the product and spent time developing it based on what I thought the market needed and perfecting it. In hindsight, I would have liked to bring it to market sooner and develop it in line with market requirements.
What's your advice for entrepreneurs who are just starting out?
Test ideas as much as possible and with as little money as possible.
Personal passions and pursuits
Work aside, what do you enjoy doing during your down time?
Reading books, trading stocks and karting.
What are your personal and professional goals for 2021?
Personal goal: Continue to learn new skills
Professional goal: To grow HariGaji to become a leading EWA provider in SEA
What gets you out of bed in the morning?
The ability to help people with their financial wellbeing.
Where do you see yourself in 10 years?
That’s a big question! Hopefully, running HariGaji as a successful business.
HariGaji is one of 30 startups shortlisted for Cohort 05 of MaGIC’s Global Accelerator Programme. For more information on HariGaji, check out their website here. To stay up to date, follow HariGaji on Facebook, Instagram, YouTube and LinkedIn.