Bandhu

In India’s journey of migration-driven urbanization, making it to the city is not the same as making it in the city. Over 200 million blue-collar workers migrate internally within India, multiple times per year, in search of better livelihoods. Yet the migration process is full of blind bets. They need to secure a stable job and affordable housing simultaneously–which rarely happens–and they remain caught in an unpredictable back-and-forth cycle between the rural and the urban. These uncertainties make them unreliable workers to their contractors and employers, who struggle to find and retain appropriately skilled workers, as well as low-income landlords, who struggle to find reliable tenants. One wrong step for a worker can have serious lifelong consequences for them, and often multiplies the risks across the urbanizing ecosystem. 

At the center of the migrant’s dilemma is the problem of identity and invisibility: they are neither fully “rural” nor “urban,” and they continue to have limited access to digital or financial services despite recent strides in India’s digital public infrastructure and digital identity initiatives. Migrants’ entitlement eligibilities and identities are tied to their hometowns rather than their work destinations, and their limited budgets push them toward informal housing, in areas not yet considered as truly “urban” in regional economic policy. Migrants living in these areas miss out on critical benefits intended for urban residents, and must return to their hometowns simply to access the benefits intended for them. 

Migrants are not only invisible to policymakers, but also to formal institutions that could provide capital for critical needs or secure them a stable home in the city. Migrants spend decades in precarious housing arrangements, hoping to eventually find a foothold in the city– either through affordable long-term rentals or an affordable housing asset to enable intergenerational socioeconomic mobility. Compared to typical white-collar workers accessing formal real estate markets, migrants pay four times as much for rent and a hundred times as much for long-term tenure on a per-square-foot basis. The search and transaction process involved is inefficient and priced unfairly. This leaves little money for single migrants to bring their families to the city–the key to unlocking improved education and healthcare, their intended migration outcomes. Formal institutions like banks/NBFCs are unable to lend to a migrant with an uncertain presence in the city, a subsistence income, no standardized residential documentation, and no credit history. 

Thus, migrants’ uncertain identities and the lack of data on livelihood/housing patterns and preferences keep them invisible–and therefore financially excluded, vulnerable to predatory lending, and with no feasible pathway to socioeconomic mobility. The paradox is that access to government entitlements/capital requires a stable residence, but access to a stable residence requires access to capital. Furthermore, migrants’ invisibility keeps policymakers from making informed decisions on infrastructure and economic development that could help cities respond effectively to today’s migration and climate change crises.

(https://www.indiaspend.com/governance/migrant-workers-no-reliable-data-or-policy-737499)

Our mobile platform, Bandhu, enables low-income workers in India to simultaneously line up accommodation and livelihood—the two most fundamental needs for any newcomer in a city. Bandhu visibilizes these migrants, their cash flows and the rented assets to formal financial systems. It enables migrants and those involved in their journeys to access the burgeoning Lendtech and Insurtech solutions that can lead them to greater socioeconomic mobility.

We provide each potential migrant with a package consisting of a job and associated rental housing, to help him or her decide when, where, or even whether to migrate. These job-housing bundles cater to a worker’s desired time split between their rural home and the city, rather than forcing them into employer-determined conventions. Our multilingual, AI-enabled tech suite helps workers access Bandhu whether they have a feature phone or a smartphone, and our combination of physical and digital touchpoints ensure we meet the migrant at his or her own level of comfort. 

Our algorithms also meet the employer’s project needs by matching individual workers and subcontractors into customized, task-specific teams. Meanwhile, those who connect rural-urban networks—for example, existing sub-contractors and experienced seasonal migrants—are able to onboard other workers (often from within their own communities) to our app and monitor their progress. Often, the definition of employer, subcontractor and broker is fluid, and they may well be the same person. These sub-contractors are also able to bid for and secure tenders/work orders from large employers and are able to scale up their entrepreneurial journeys. Based on their digital payments to migrant workers on our tech platform, subcontractors will soon be able to access low-cost working capital loans.

A small-time landlord or a seasoned migrant, or a housewife from a low-income community, can list an extra room or a bed as a housing offering to other migrants, thus offsetting living costs. These individuals, known as “champions” on our platform, are also rewarded for onboarding demand and supply to our platform and for enabling the completion of a transaction cycle. Meanwhile, migrants can browse and apply for affordable rental listings digitally through multiple direct and assisted physical/digital channels. Landlords, often senior migrants, get access to this pool of verified tenants for their vacant spaces. Based on landlords’ digital rental cash flows on our platform, they will be able to access home improvement loans/housing loans to expand and improve their rental offerings. 

Most importantly, within Bandhu’s platform, workers’ rent payments would start to passively contribute towards long-term asset ownership.

With these assured rental-housing options that are optimized for each individual’s behaviors, Bandhu empowers a worker to make critical economic decisions with confidence, while paving a way to financial inclusion and asset ownership. Critically, our algorithms ensure social compatibility and presence of community in the migrants’ destinations.

We primarily serve India’s 200 million blue-collar workers who migrate between the rural and the urban in search of better livelihoods. They lack access to the financial instruments that could enable them to establish a foothold in the urban economy and improve their long-term financial and socioeconomic well-being. 

Bandhu’s solution will enable migrants and those involved in their migration journeys–employers, contractors, and landlords–to save time and money, minimizing their search costs in finding a job, worker, home, or tenant–while digitizing the process and its cash flows.

Workers can get access to rental deposit loans to afford better accommodations; contractors can get access to working capital loans based on their regular digital payments to their workers; and small-time landlords can get access to home improvement loans based on their rental histories with tenants. 

For the migrant workers, we will be able to reduce search and transaction costs by 90% compared to current practices, and reduce lending rates by 50%–releasing them from perpetual debt cycles and affording them opportunities for greater stability. We have already reduced search and transaction costs by 75%.

These workers currently have low levels of linguistic literacy and trust/access to technology, despite recent strides in digital public infrastructure that helps Indians make digital payments. We have learned that combining a physical presence with a variety of digital access points is necessary to build this trust and help this group digitize faster.  We account for users’ varying levels of technology access and literacy through multiple touchpoints–from a feature-phone-only IVR system, to a WhatsApp chatbot and conversational AI, to the complete Bandhu platforms on a smartphone. Each touchpoint is available in multiple languages. Migrants can also access Bandhu at partner NGO centers, local photocopy shops, and Common Service Centres (CSCs).

Our incremental approach is creating a pipeline of lendable opportunities for the larger fintech ecosystem, while creating community-level financial inclusion for migrants taking their first digital steps. Bandhu connects and optimizes a manifold match between workers, employers, contractors (brokers) and landlords, fostering financial inclusion and ensuring safer and enriching rural-to-urban migration. 

Rushil Palavajjhala (Co-Founder/CEO) has 10 years of on-ground experience in the real estate/construction/infra sector, understanding how to work with government, private, and nonprofit clients on designing, financing and implementing affordable housing projects and policy. His Master’s thesis focused on migration-driven urbanization and was informed by interviews with migrants along India’s western industrial corridor. His studies centered around real estate and infrastructure finance and investment for developing countries. He has formulated financial strategies for the Indian government to house six million people under its affordable housing policy, and has worked across India, Sri Lanka, Zambia, Peru and Mexico on such issues.

Jacob Kohn (Co-Founder/COO) has 5 years of experience as a management consultant and data analyst, and developed a data-driven organizational approach to understanding informal economies in his Master’s thesis on formalization scenarios for Mumbai’s informal recycling sector. He speaks Hindi and is a key link between the field and technology teams at Bandhu.

Darsh Shah (Co-Founder) has deep experience in technology and AI, and is a native of Mumbai. 

Bandhu’s operation and product design team members come from a variety of socioeconomic, religious, and ethnic backgrounds–those often underrepresented or marginalized. This informs their approach to working in migrant/low-income communities, where religion and caste have long affected socioeconomic mobility. It has helped them be effective communicators in engaging communities and in trust-building initiatives, especially when combined with their formal graduate studies in development economics and migration from India’s leading social science programs. 

The field team members are hired exclusively from the migrant communities with work in.

Bandhu’s field team and product/technology teams work closely together, developing solutions collaboratively which are informed by community input and feedback in successive iterations. They incorporate design thinking processes to better communicate Bandhu’s offerings to our target communities through posters, pamphlets, and technology applications. 

90,000

1. Visibility - As a globally-recognized program, MIT Solve would provide us with enhanced visibility to larger international networks. So far, we have gained much from the U.S.-based startup ecosystem, and seek to further expand these networks outside the U.S. and India. The visibility Solve gives us will help us attract top talent and build on local partnerships. 

2. Partnerships - MIT Solve stands apart in attracting mission-driven investors and partners. As much of our success will be contingent on robust local and international partnerships, Solve’s access to this strong global network will be invaluable to our mission. 

3. Legitimacy - MIT Solve would connect us to prominent institutions and individuals, lending our venture legitimacy in places where reputation and association are prerequisites for success. 

4. Mentoring - MIT Solve’s 12 months of close mentoring would significantly build on our existing successes, as we develop and market our ideas to a much wider audience. Solve is well-known for its focus on social impact, and we particularly hope to receive mentorship in scaling and marketing Bandhu. Furthermore, we would benefit from guidance from Solve’s mentors on how to scale up responsibly and with clear ethical milestones. 

5. Investors - Investors associated with MIT Solve already have a clear social-impact focus, and are often tied to much larger institutional networks. As part of our immediate goals is fundraising, these connections would be invaluable in scaling our enterprise. 

Bandhu’s business model provides a unique pathway designed to lead a migrant from their first urban point of contact–a job or housing–to a gradual journey into digitization, formalization, digital payments, financial inclusion (Lendtech) and urban citizenship. 

Our solution visibilizes assets and cash flows in this migration journey that until now have remained hidden. Bandhu unlocks financial value in this process, while easing the documentation and regulatory burden for migrants. We accomplish this by tapping into and realigning incentives of existing networks of rural-to-urban migration–working to empower local women housing champions and including space for brokers and contractors in our business model. We maximize the social capital of these groups and transform it into financial capital. 

Unlike any other player in the ecosystem, we optimally bundle jobs and housing, and take an ecosystem approach, incorporating the various needs of migrants in their rural-to-urban journeys into our platform. We work across several sectors including construction, manufacturing, and logistics, in which migrant workers typically seek to earn urban-level wages. 

We are agnostic to a user’s level of linguistic and technology access, literacy, or limitations. Here we leverage AI to provide customized solutions and reach a larger pool of users through voice-to-text and other methods. Such touchpoints, which include automated real-time passive measurement and live learning models of user behavior, allow us to capture large amounts of behavioral and transactional data. This data allows us to rapidly design and test interventions in two- to three-week learning cycles–improving our ability to identify micro-intervention opportunities and quickly adapt our platform accordingly to various user behaviors and needs. 

Other existing solutions tend to skip critical needs like bundling jobs with housing; fail to cater to migrants’ rural-urban time splits or low literacy rates; do not personalize the user’s experience; or recognize the role of brokers’ social capital in their platforms. Our approach is adaptive to the societies we work in and not disruptive to them. We recognize the critical role that broker/caste fellows/elders play and make them a critical part of our behavioral change design and business models.

Next 3 months: 

• Reach: Visibilize and enable access to 100K migrant workers (by August 2023)

• Geographic Expansion: To Mumbai, Pune and Goa through strategic implementation partnerships

• Product Rollouts: Jobs Product 3.0 including tenders feature for Contractors

• Milestones: 

  • Scale micro-entrepreneurship behavior by women champions

6-12 months: 

• Raise our next funding round

• Reach: Scale up our housing product to 200K users, including at least 25K tenants via B2B channel

• Geographic Expansion: Pune, Bangalore, Hyderabad

• Product Rollouts: Lendtech product for petty contractors, subsistence landlords, and migrant workers

• Milestones: 

  • Onboard at least 100K beds on Housing platform

  • Gain at least 10 SaaS customers

  • Facilitate and observe disbursal of working capital loans to 500 contractors and subsistence landlords

• Operations: Capacity-building and formal presence at all bus stations and railway stations in given geographies

18+ months:

• Reach: 3M people (2024); 40M people (2025), including at least 200K tenants through B2B channel

• Geographic Expansion: Nationwide across India

• Expand operations to metro areas of India’s 12 largest cities

• Milestones: 

  • Onboard at least 600K beds on Housing platform

  • Gain at least 100 SaaS customers

• See our lending products for contractors and landlords driving digitization in the currently informal systems, while seeing rapid gains in financial inclusion of workers as an outcome - scale to 2000 disbursals.

• See a significant increase in transparency and price rationalization in the affordable housing sector of cities we operate in.

As we solve for a migrant’s job and housing journey towards greater digitization and financial inclusion, we take a step-by-step approach that takes into account varying levels of formality, linguistic/digital literacy, and migrant preferences and milestones. 

Our regular metrics at a base level include housing occupancy rates and number of listings, number of users who onboard through our multiple front-end channels, and workers’ cash vs. digital transactions for paying rent and deposits. We capture migrants’ initial access points to our platform, behaviors while using the platform like searching, trade-off considerations, and decision-making, and net financial gain or loss. We also capture the search and transaction behaviors of the employers, contractors, and landlords on our platform. 

Over time, these data points–particularly on transaction behaviors–help us gauge workers’ degree of digitization, percentage change in successful transactions between workers as tenants and landlords, credit worthiness, and reduction in credit risk for both workers as borrowers as well as asset quality. We will be able to measure the amount of risk, travel, and cost burden as workers secure better economic gains, especially as they move to areas close to public transport–leading to vacancy reduction in these areas and emissions saved on new construction and private vehicles. We will also be able to see workers’ wage increases and skill-building progress; number and size of bids secured by contractors; employers’ success rates in securing compatible and competent teams of workers. 

Our data measurements will be a critical tool for financial inclusion and lending across employment and housing in the informal sector. We will be able to offer rental deposit loans to workers; home improvement loans to landlords; working capital and payroll loans to contractors; and working capital loans to employers, particularly those who we see making progress achieving milestones in environmentally sustainable and socially equitable business practices through our platform. 

We are also able to measure progress on various behavioral change trends such as increase in risk appetite and evolving entrepreneurial mindsets at an individual level.

Our efforts align with UN SDGs 1, 8, 10 and 11, and we hope to extend our impact to the 1 billion internal migrants globally.

Bandhu believes that securing a job together with housing is critical to a migrant’s success in any destination–easing migrants’ transitions from rural to urban, from conflict zones to regions of safety, and from financially-limiting to opportunity-rich. 

Our research at MIT showed critical value losses and hidden costs in a migrant’s urbanization journey; we found that, counterintuitively, a migrant who chose informal housing ends up paying as much as four times as much per square foot as a migrant who was able to secure formal housing. Over time, accounting for additional compounding costs and extra amenities, the opportunity cost is 128 times higher for a migrant in informal housing–and they are not able to secure an asset. 

In our Housing product, a Housing Champion or landlord posts a property; we enable migrant workers to compare these properties within compatible communities and make an informed choice. As workers browse and transact for jobs and rental homes digitally, we help them identify relevant and stable jobs within reach. These jobs allow workers to demonstrate cash flows and pay regular rent to their landlords; with this transaction data and digital cash flows, we are able to offer landlords low-cost home improvement loans, and rental deposit loans to their worker tenants. Meanwhile, we help contractors bring on more workers to their teams as they bid for work orders, helping our platform scale. As contractors secure tenders and pay their workers digitally, these transaction records allow us to offer contractors working capital loans at reduced rates. This cash flow data also enables us to offer workers low-cost capital loans, enhancing their livelihoods.

We are effectively creating a pipeline that has enough immediate value for everyone to take the next step, with being able to indulge in blue-sky thinking with an actual pathway to realization.

The sequence - Discover - Digitize - Dream - Decode - Securitize - Deliver

Ultimately, this theory of change provides a more transparent and secure rural-to-urban migration process with a clear pathway to visibility, financial inclusion, and access to better incomes and capital. 

Bandhu’s core technology is a robust, standardized platform with a single back-end and multiple front-ends designed to “meet the user where they are”–at any level of linguistic/digital literacy–to allow for flexible behavioral adaptation as this user group begins to digitize further. 

Our front-end applications cater to users’ preferred technology interaction behaviors and preferences. For the most technology-literate users, we have three smartphone apps–Jobs, Housing, and Entitlements. Users with intermittent access to a smartphone and basic knowledge of it can interact with our WhatsApp chatbot. We are now integrating conversational AI, to enable non-structured voice interactions from our users to help them get clear answers to their job, housing, and entitlements questions gathered from public and our proprietary sources. Users with a feature phone can call our IVR number and get connected to our platform. Being front-end-agnostic also allows us the flexibility to rapidly develop new entry points to user data generation. For example, in response to users’ observed Instagram scrolling behaviors, we can create a feature on our platform that allows a user to “like” a skills video posted by another user (i.e. allowing employers to quickly review workers’ skill sets)--and build this simple interaction into any front-end that allows for a video component. 

All of these entry points are enabled in multiple Indian languages and seed our common back-end database. This allows for cross-platform interactions between voice, chatbot, and smartphone app users, and helps us analyze user preferences and make personalized recommendations. We are also leveraging AI in our chatbot and voice interactions to autogenerate  documentation formats and underwriting acceptable to lenders. 

Our leadership team’s backgrounds span two nationalities (India and US) and professional experiences in affordable housing, informal economies, project management, architecture, data science, product management, and AI. Two of our core team grew up in areas where our families were ethnic or religious minorities in the community; this has informed our approach to better represent minority and marginalized communities. 

Additionally, 90% of our interns/fellows have been women; 40% of our software developers are women, mostly from smaller towns in India. Two women are core advisors/mentors of Bandhu.

Bandhu recognizes the strengths and skill sets of the women in our target communities, leveraging these factors to multiply women’s potential and empower them further. Bandhu’s Housing Champions are nearly exclusively housewives who would have normally stayed at home doing domestic work during the day. Our model provides them a way to get extra income while accommodating local cultural norms. We have even observed small cultural changes as a result as well—with women venturing out of their immediate local vicinity (a small resistance to patriarchal practices), to other parts of their neighborhood and even adjacent areas of the city which are now accessible to them—all because we have demonstrated a steady income model for them and their families. In the process they have gained greater confidence in using smartphones, working collaboratively, and pursuing leads within and outside their communities. 

Our field team has deep on-ground personal and professional experience with the migrant/low-income communities we work in, where religion and caste have long affected socioeconomic mobility. Most come from historically disadvantaged/ underrepresented sections of Indian society, such as the OBC, SC, and Muslim communities. Our field team is exclusively hired from the communities we work in.

In our products, we enable diversity in gender selection (male/female/other) during our user signup process. We design for visual accessibility, with bright, contrasting colors and clear buttons with images and text that prompt users with low vision/literacy to use our products. 

We are  currently doubling down on our voice-based multilingual conversational AI integrations to allow for less-literate and technology-limited users.

We earn B2B revenue with our SaaS product offering data analytics and investment advisory to private equity/real estate groups and others in the real estate industry. We provide a differentiated dataset for such applications that is particularly useful to hyper-local real estate investment decisions.

We earn revenue through B2B service agreements with large construction and manufacturing companies who pay us to aggregate workers and connect them with housing. This reduces their search and transaction time and cost by 75%.

These B2B engagements develop familiarity among our direct consumer base (i.e. their workers), gradually driving up B2C adoption and revenue. 

Our B2C revenue comes from guests and housing providers, who pay us to access various service offerings on the platform like video tours and expanded housing choices. Beyond the revenue, the aggregated cash flow data allows us to offer rental deposit loans to workers and home improvement/partnership loans to subsistence landlords, over which we earn spreads. 

As compared to existing systems that cost a tenant 100 USD to search and secure a bed, we have reduced the cost to 15 USD. Meanwhile, subsistence landlords see that the cost of finding a tenant has gone down from USD 80 to USD 15 through Bandhu.

We acquire customers through both physical and digital marketing strategies, using parallel top-down and bottom-up approaches, enabling various enablers through tech. 

We use a variety of tech-enabled top-down, rapidly scalable channels to reach our customers, including labor-sector NGO partnerships, government contracts, influential employers (large enterprise clients, industry associations, collaborations with semi-government organizations) and other startups working on complementary products. On the bottom-up side, we identify and train women (often stay-at-home mothers otherwise unable to participate in the workforce) from migrant worker settlements on how to use our app. We pay them an incentive to digitally onboard affordable rental housing and skilled workers in their communities. On similar micro-entrepreneur models, we also partner with local community leaders and NGOs to identify/onboard workers at labor squares, distribute tangible media like posters/flyers, and use a “train the trainers” approach to build trust and reliable exchanges with our target audience from the bottom up.

Currently we have supported our business through B2B data analytics/consulting revenue, grants and limited equity dilution. Our B2B model will generate revenue at scale as we connect with large companies to help them aggregate and house workers–building brand recognition and trust among our migrant customer base. These efforts will contribute to our longer-term B2C financial model, in which migrants directly use our app to find jobs and housing across India. This is a longer-term model because of the low levels of digital literacy and trust among this group, which we are changing through a combined physical/digital approach. 

Currently we are already positive on unit economics per completed transaction, and require scale to offset fixed costs on technology.

We began Bandhu with grant capital and prize money from the MIT ecosystem, including MIT Legatum Center, MIT DesignX, MISTI, and MIT Sandbox.

We raised a pre-seed round led by the MIT Met Fund and senior members of the MIT community coming in as angel investors.

Subsequently, we have won prize money and grants from the Bill & Melinda Gates Foundation, Mulago Foundation, Columbia University, Habitat for Humanity, Villgro Foundation, Omidyar Network India, and The Nudge Foundation.

We have also won the Sankalp Global Award 2022, and the HDFC PropTech Award 2022.

The grants allowed us to test and demonstrate a scalable business model, and develop and deploy our technology platform in multiple iterations that responded to community needs and abilities. 

From the markets, our four current primary revenue streams are: 

1) B2B revenue: Large employers pay us a service fee to aggregate workers and provide them housing. We will soon begin leverage LendTech, securitizing cash flows to Contractors, Landlords and Tenants on our apps. We work with third-party NBFCs and other financial institutions who would pay us loan origination fees, timely repayment fees, and a share of interest rate spread. 

2) B2B SaaS product: Subscription model for actionable data/sales analytics for PE investors, consulting using aggregated/anonymized data and accumulated expertise in the sector. Bespoke consulting is a value added layer on our SaaS data product.

3) B2C revenue: Users pay Bandhu various fees, often through prepaid tokens that can be refilled or cashed out. Our Housing product has been generating revenue since its inception in mid-2022. Tenants pay to view property videos while searching. They can optionally pay to arrange a property visit. Both tenants and landlords pay a success fee upon finalizing an agreement. Landlords can optionally request Bandhu to provide improvement insights.

Our Jobs product has just begun implementing these fees. Employers pay us to secure a customized team of workers. Contractors pay us a commission when generating monthly bills, and also when receiving a mobilization advance from the employer.

4) Civic tech consulting/partnerships for other ecosystem players trying to reach a similar target audience with a different product. Productization as a service for brick and mortar/ less digital NBFCs etc.

Currently we are already positive on unit economics per completed transaction, and require scale to offset fixed costs on technology.

Our unit economics considers one bed in a property as one unit; in the past nine months we have onboarded 36,000 beds. 

We have demonstrated a scalable model for women/community leaders who previously never used a smartphone; they are evangelizing the product organically to earn incentive-based incomes. 

We have engaged with key industry players within India and are in ongoing conversations with large financial institutions and multinational organizations with migration/labor missions. We have secured key partnerships with major migration-focused NGOs in India and technology partnerships with semi-governmental organizations and industry leaders. We have been invited by governmental agencies to collaborate on their skill/urban development initiatives.