NEW DELHI, June 17: For centuries the most prized metal for all auspicious occasions, gold is even today stored away in lockers, outshining many other asset classes as the investment of choice with assured returns and the ability to glitter amid volatility.
Now, technology is shaking things up in the age-old scenario with the advent of a company such as SafeGold. Offering novel ways to invest in the yellow metal, the digital platform allows customers to buy, sell and receive vaulted gold at low ticket sizes 24X7 with the tap of a button.
SafeGold’s vision is to create a global standard for digital transactions in gold, founder and CEO Gaurav Mathur told PTI.
“Digital gold has zero cash payments, digital KYC and is ideal for small ticket purchases of gold. It benefits from current market trends at multiple levels as is evident from the scale and growth of our business,” he explained.
The mission, Mathur added, is using technology to create innovative products in the gold industry by building a technology driven ecosystem, including consumers, banks, NBFCs, fintech platforms and jewellers, all connected through a common platform.
Typically, festivals see a surge in gold buying in Indian households where volumes can top 10x-20x of normal daily levels. Having the entire infrastructure on Amazon Web Services (AWS) cloud means that scaling up to manage these peaks becomes an “easy process”, Mathur said.
Excerpts from the interview:
Q: Can you tell us more about SafeGold’s larger vision, and the key milestones?
A: SafeGold’s vision is to create a global standard for digital transactions in gold. We started with the democratising of the purchase of gold in India. Nearly 50 million people have bought SafeGold since our inception in 2018.
After that, launching the world’s first gold leasing platform which allows owners of physical gold to earn a yield on their metal rather than have it sit idle in a locker, and international expansion have been our milestones. We are now live with TrueMoney, the largest mobile wallet in Thailand and adding more partners across Asia.
Q: What is the concept of digital gold, and how does it differ from traditional means of buying gold?
A: Digital gold has two main benefits. You own physical gold that is securely stored in world class vaults so you don’t need to worry about keeping your gold in a locker; and you can conduct a range of transactions related to that gold over digital channels.
Everything you can do with physical gold – buy, sell, convert to jewellery, gift, use as collateral for a loan – you can do faster, better and cheaper with digital gold. All done over your phone without the need to visit any physical shop or locker.
Additionally, features like buying in small ticket sizes and leasing are possible with digital gold, but not possible when you are buying gold from a shop.
Our business model is to provide the entire range of gold related transactions via APIs to fintech platforms like payment and investing apps so they can provide digital gold as a product to their users.
Q: Could you talk about your revenue for FY24 and how has the business performed on financial metrics?
A: We’ve grown revenue by 35 per cent to Rs 6,100 crore in FY24, from Rs 4,500 crore in FY23. We’ve been a profitable company for a few years now and hope to grow our profits at a faster rate than our revenue.
Q: What are the dynamics of India’s gold market, and the changing trends in the industry?
A: Historically gold has been dominated by the unorganised sector. The biggest trend has been the move of the industry towards the organised sector. With the advent of GST and mandatory hallmarking of gold jewellery, there is a strong regulatory push to move the industry towards the organised sector.
There is also a shift in consumer preferences towards lower ticket gold jewellery and investment.
Digital gold has zero cash payments, digital KYC and is ideal for small ticket purchases of gold. It benefits from current market trends at multiple levels as is evident from the scale and growth of our business.
Q: What are SafeGold’s plans for the future when it comes to market expansion, and expansion of offerings?
A: We will continue to expand the range of products in India and grow to other markets across Asia and the rest of the world. Even in India, we are at less than 2 per cent of the addressable market and expect to grow at 30-40 per cent annually for the next decade.
Our users are looking for convenience, reliability and innovative products. Our mission is using technology to create innovative products in the gold industry. We achieve this by building a technology driven ecosystem which includes consumers, banks, NBFCs, fintech platforms and jewellers, all connected through a common platform.
Q: How have you embraced new innovations to stay ahead? What benefits have these brought in?
A: Our biggest innovation has been gold leasing. This has taken an idle asset that normally sits in bank lockers and made it into a productive, yield earning asset. We are also the first digital gold platform that has integrated with leading jewellery brands like Tanishq – this allows a SafeGold customer to seamlessly exchange their digital gold for jewellery at any partner retail outlet.
Q: What did AWS enable you to do better, and what benefits have you experienced running on AWS?
A: The biggest benefit of AWS is the easy scalability. There is a surge in gold buying during various festivals where volumes can be 10x-20x of normal daily volumes. With our entire infrastructure on AWS cloud, scaling up to manage these surges is a very easy process. Managing something like this with traditional on-premises systems would be very tough.
Secondly, it is easier to recruit engineering talent that is familiar with AWS. Other cloud platforms may be cheaper, but it is tough to find talent that is comfortable and familiar with platforms apart from AWS.
(PTI)
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