Bridging India’s financial divide – How startups can leverage India Stack’s limitless possibilities


Potential Vs. Action

Aadhaar, e-KYC, UPI and Digilocker are buzz words most Indian startups use liberally in their pitches to garner investor attention. But are they truly leveraging the power of India Stack? Perhaps yes, however there hasn’t been much action on-the-ground to prove this. While there are several startups that aim to use India Stack and some are even implementing it, I believe that its full potential to accelerate startups’ growth remains to be seen. Described as “Technology for 1.2 billion Indians”, India Stack which is backed by Aadhaar, the world’s largest identity database, offers Indian startups an opportunity to truly disrupt the way Indians pay, save, borrow, shop, work, communicate, store, trade…the possibilities are limitless.

India Stack – What lies within?

India Stack, as you may be aware, is an open Application Programming Interface (API) with Aadhaar as its base, providing a way to build an entire digital world around a uniquely identifiable individual.



What is India Stack all about?

Apps leveraging the stack can be designed for desktops, phones, wearables, pretty much any device you can think of. Each API within India Stack is owned by a separate entity, which owns the specifications and the governance of that API. While FinTech startups are the first that come to mind as users of India Stack, the platform finds application across diverse sectors- education, skilling, healthcare, and agriculture to name a few. At the core, any startup using technology can use elements of India Stack. Below are two conceivable scenarios for our select investees, that will help understand the potential of India Stack. We believe that there’s a high probability these scenarios will be a reality in the very near future.

How it could stack up in the future?  

Milaap, is India’s leading digital crowdfunding platform for personal and social causes, enabling individuals to raise funds online for causes such as medical expenses, education, housing, natural disasters, water and sanitation. Donors/lenders get onto the platform, choose their preferred campaign and donate/lend within seconds. Milaap is a ‘tech-for-good’ company and its beauty lies in the collective power of micro-funds; individuals can choose to donate small amounts, which when grouped together can be channelized to address a pressing need, often resulting in improved livelihoods. Sachin’s two-year old son, Rohit, was suffering from a rare disorder of Intestinal Malrotation, a congenital anomaly that required INR 15-20 lakhs to be treated. Rohit’s treatment required him to be in and out of the hospital and Sachin was struggling to keep pace with the piling bills. Sachin’s wife was a stay-at-home mother and the family survived on Sachin’s meagre salary as a salesman at a car showroom, leaving negligible savings at the end of each month. He heard about Milaap from someone at his workplace. Curious to learn more, he logged onto the platform through his mobile phone, keyed in his name, the amount he wished to raise, the cause and its details. He then provided his Aadhaar number and address proof through his Digilocker. As the hospital where Rohit was admitted was registered on the Milaap network, Sachin’s application was approved instantly. His Aadhaar-linked bank account was used to gather the funds. The Milaap team helped Sachin pen down his story and he went on to raise the requisite amount in less than a week from donors across India and internationally.

Another investee, DriveU is an app-based service that provides professional, verified drivers for your personal car. It’s a marketplace that matches demand from car owners at one end with a supply of professional drivers at the other end. Rajesh, who worked at his local grocery store as a sales boy, earned Rs. 10,000 a month. When he heard about DriveU from his neighbor, a registered driver with the company, he was excited at the possibility of making a living out of driving, an activity he enjoys thoroughly. Earlier, he worked as a full-time driver but lost his job abruptly when his employer relocated to Singapore. To bridge the gap, he took up the sales job but was keen to get back to driving. Rajesh walked into the DriveU office in Bangalore at 10 a.m. on a Friday morning,  met Ashok who heads operations for the company, and expressed his desire to join the platform. Rajesh then provided his Aadhaar number, which was verified in a few seconds. He gave DriveU access to his Digilocker through a one-time password, allowing them to retrieve his driving license and proof of address. He also provided references of his previous employers. Ashok made two quick calls and confirmed that all was good. Soon after, Ashok got someone from his team to accompany Rajesh for a test drive. He completed it effortlessly. Rajesh then used UPI to pay DriveU the initial deposit money, a requisite for all drivers, and voila! Rajesh was a driver on DriveU! All this was completed within an hour; driver onboarding earlier took 7 days for DriveU. The time difference speaks for itself, not to mention the savings on costs and efforts.

Limitless potential to leverage the Stack

The above scenarios are only a glimpse of the many applications of India Stack. High value low volume to low value high volume transactions; drastically lower customer acquisition and transaction costs resulting in inclusive growth; uniform lending rates to individual pricing of risk based on digital footprints; gamified products that learn people’s behaviors and enable goal oriented savings…. these are just a few examples of what India Stack can enable. Startups that integrate elements of the Stack to rapidly scale their business are what investors are increasingly seeking to back. We, at Unitus Seed Fund, are looking for those truly interested in leveraging India Stack to leapfrog their startup to the highest level of (unimaginable) growth.


This article is written by Sneha Rajan, Senior Associate at Unitus Seed Funda Bengaluru-based venture fund, investing in early-stage startups innovating for the masses.

India Stack: Thoughts on Unleashing the Potential of Digital India

On December 1st 2016, in a much-awaited press conference, Mukesh Ambani, CMD of Reliance Industries, announced that Reliance Jio had crossed 50 million subscribers – a feat it had achieved in a mere 83 days. This made Jio the world’s fastest growing tech company surpassing the likes of Facebook, WhatsApp, and Skype. This astonishing achievement was made possible by the strategy of rolling out e-KYC across all outlets in India, allowing SIM activation in under 5 minutes. 95% of activations were done using e-KYC resulting at a staggering average rate of addition of 6 Lakh subscribers per day. I experienced this first-hand – I went through all required steps of identification, KYC, SIM card application and document signing – all in a couple of minutes, in seamless, paperless, and secure way. I walked out of the Reliance Digital outlet with an elevated sense of excitement, being reassured of the promise of Digital India and the potentially unlimited opportunities as a developer on India Stack.

India Stack as a Platform

Before delving into the nitty-gritties of India Stack (refer to this comprehensive article for an introduction on this topic), it is important to take a step back and understand the platform architecture and the thought process behind the design. Basically, India Stack fits the broad structure of a “platform” because it provides the digital infrastructure to link consumers (a billion plus people) and producers (developers, ISVs, start-ups, enterprises & government). It also provides specifications for service providers to provide complaint services on top of the core APIs, which producers can use to create compelling digital solutions in their own domains. This is illustrated below:

A key manifestation is that the interactions, transactions, and data exchanged in this ecosystem will make India “data rich”, allowing data-driven decision making for scale and inclusion. Nandan explains this in his talk, in detail. This is illustrated below:

Image source: iSpirt

To give another perspective, India Stack has an “hourglass” platform architecture. At the waist of the hourglass is a minimal, simple set of open APIs which allows standardization and easier execution, while adhering to all necessary regulations. Above and below the waist are the ecosystem of services, devices, and applications. Unlike the traditional pipeline structures, this layered, unbundled approach allows for innovations to flourish across the ecosystem – each part can be conceived, experimented, planned, and executed in parallel. Pramod, chief architect of Aadhaar & India Stack explains this in a simple way in his talk about India Stack. Nandan and Viral, in their book, Rebooting India explain how Aadhaar also fits this model. This model is illustrated below:

Image Source: iSpirt

An API platform alone cannot foster change. The “perfect storm” of innovation happens when digital infrastructure is supported by government’s market making policy and favourable regulation. This is what Swati covers as the framework required to foster experimentation and innovation in this excellent thought paper. To this end, the Digital India initiative, launched in July 2015 by the Government of India has a 3-part vision:

  1. Delivering Digital Infrastructure as a Utility to every citizen
  2. Providing governance and services on demand
  3. Digital empowerment of citizens

More details of how this vision is being translated to action is available in this deck from the Department of Electronics and Information Technology or DEITY). Perhaps, I am oversimplifying this massive undertaking, but basically, the Government of India is putting together several schemes under one umbrella, aligning ministries, putting a monitoring committee, setting aside budget for creating broadband infrastructure, enabling universal mobility access, re-engineering government processes using IT, and implementing digital technology-based service delivery across education, healthcare, agriculture, finance, justice, etc. To draw an analogy, a modern, digital expressway is being built as we speak. It is up to developers to meaningfully employ that infrastructure.

What does all this mean to you, as a developer?

Simply put, the conditions are ripe for you to create innovative digital solutions for the entire Indian economic pyramid – for a billion plus people across all domains. Where there were barriers a few years (or months) ago, bridges are being built; thought is meeting action. Disruption is imminent.

To give you a perspective, I have created a couple of aspirational use cases where the potential of India Stack is realized. These are illustrated below:

These use cases illustrate how different parts of the India Stack – like Aadhar authentication, UPI, Digilocker, e-Sign, e-KYC and Consent Architecture can be used to create compelling digital solutions for the common man. These are representative illustrations, but the possibilities are limitless.

What about Economics?

The question that may come immediately to one’s mind is – can we really build innovative, yet economically viable digital solutions for the Indian pyramid? To this end, I draw a lot of inspiration and ideas from CK Prahlad, especially his seminal book – Fortune at the Bottom of the Pyramid. I believe all the ideas are equally applicable in the digital age too.

Let me start by listing several myths around the Indian Pyramid (for the sake of this discussion, I use the term Bottom of Pyramid (BoP) to represent the middle and the bottom of the Indian economic pyramid, which constitutes more than 900M Indians, whose annual household income is less than 10 kakh):

  • The BoP are not our target consumers because with our current cost structures, we cannot profitably compete for that market.
  • The BoP cannot afford and have no use for digital products and services
  • Innovation is for the top of the pyramid. The BoP can use the previous generation of technology
  • The BoP is not important to the long-term viability of business.
  • Developers cannot be excited by the business challenges that have a humanitarian dimension
  • Cheaper technology and services means cheaper quality


These myths typically stem from a lack of understanding of behaviours at the BoP. To mention a few facts about BoP:

  • Often pay higher price for some goods and services (especially credit)
  • Cannot afford differentiated products, but readily accept advanced technology
  • Are brand-conscious, price-conscious
  • Have well connected communities (word of mouth)
  • Collectively have purchasing power
  • Are always trying to upgrade from their existing condition


The Solution Approach for BoP

Every digital solution must meaningfully tie together Experience, Economics, and Technology. In this post, I want to set the focus on the economics (experience and technology deserve another post). The most important consideration for the BoP is that any digital solution should make technology and experience choices that maximize Price-Performance ratio. To understand this, let’s look at some examples of innovation at the BoP:

  1. The Jaipur prosthetic leg (case study in Prahlad’s book) cost only 40$ while those in the west cost upwards of 8000$. However, the design was meant to address the basic mobility needs (and dignity) of the poor who had lost their limbs – being effective enough to help them do their daily jobs while being highly affordable.
  2. If you walk to any Kiraana store in a village, you wouldn’t see shelves of large-packaged products. Instead, you would see chains of small sachets hanging from the ceiling covering every centimetre of space within the store. You would also notice that many sachets would be from familiar brands – like Clinic Plus (shampoo), Parachute (coconut oil). The innovation from the FMCG companies here (like HUL) lies in packaging, distribution and unit pricing of the products representing popular brands. While the 1-ml sachet may have a higher per-unit cost compared to the 250-ml bottle that you and I buy, it works perfectly well for daily wage worker who cannot afford a full bottle. This model helps FMCG companies be profitable too.

The examples emphasize that cost-effective solutions built for the BoP are no less innovative. The question to ask before we build any digital solution for the BoP is – while being effective at addressing the need in each problem domain, does this have the best price-performance ratio? The solution might entail making specific design choices which are the best given the constraints – for example, may leverage lesser CPU cores (works on cheaper smartphones), may not assume 3G or a smartphone itself (works on USSD with a feature phone). Like in the case of Clinic Plus, the pricing unit could be devised in a way that the BoP can afford and consume the service effectively. Ramappa’s legal advisory “minutes” in the first aspirational use case we saw earlier in the post is a representative example.

Closing notes

  • Thanks to India Stack and the Digital India initiative, developers have an addressable customer base of 1 Billion+. There is tremendous opportunity for volume-based and profitable businesses leveraging digital technology
  • Innovative solutions can help foster universal participation in the digital economy, boost participation in formal sector and help GDP growth thereof.
  • We have a great opportunity for creating meaningful solutions across all domains – Healthcare, Finance, and education to mention a few.
  • We can now take constructive steps to make India cashless, presence-less, and paperless!

What do you think? Please feel free to share your thoughts and ideas.


  1. Official media release from Reliance Jio on December 1st
  2. Igniting Hundreds of Experiments – Swati Satpathy
  3. Digital India – Presentation from DeiTY
  4. Understanding the India Stack – by Pramod Varma
  5. Rebooting India – by Nandan Nilekani, Viral Shah (book)
  6. Pipelines, Platforms, and the New Rules of Strategy – HBR
  7. Nandan Nilekani – Keynote Address at Fintech For Next 400M
  8. The Bedrock of Digital India
  9. An alternative view of the future – Nandan Nilekani
  10. Fortune at the Bottom of the Pyramid – CK Prahlad (book)
  11. Presentation by Gopal & Sayan on CK Prahlad’s book


  1. Online legal services aspirational story– concept credit to Swaroop Karunakara and Satya Vikram
  2. Nikhil (iSpirt) and Sid (Exotel) for helping me with ideas and for feedback.

[Also published on LinkedIn]