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Why Addi's Business Model is so successful?

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Addi’s Company Overview


Addi is an innovative financial technology company based in Colombia, South America. Established in 2018, it aims to revolutionize the digital credit market by offering instant and accessible point-of-sale loans to consumers. Addi operates with the mission of democratizing access to financial services in Latin America, thereby bridging the gap between traditional banking systems and the modern digital economy. The company's unique approach to credit assessment, which leverages machine learning and big data analytics, allows it to serve a wide range of customers, including those who are underserved by conventional banking systems.

The business model of Addi revolves around providing instant credit at the point of sale. Customers can apply for a loan directly on the company's platform, receive an instant decision, and make their purchase, all within a few minutes. The entire process is digital, making it convenient and hassle-free. Addi partners with merchants to offer this service at the point of sale, both online and in physical stores. This not only benefits consumers by giving them access to instant credit but also helps merchants increase their sales by offering a flexible payment option.

As for the revenue model, Addi earns money primarily through the interest charged on the loans it issues. The interest rates are competitive and are determined based on the risk profile of the customer, which is assessed using the company's proprietary credit scoring algorithm. Furthermore, Addi also charges a small commission fee from the merchants for every loan facilitated through its platform. This dual revenue stream allows Addi to maintain a sustainable business while continuing to provide affordable and accessible credit solutions to its customers.

https://co.addi.com/

Headquater: Bogotá, Colombia, Latam

Foundations date: 2014

Company Type: Private

Sector: Financials

Category: Financial Services

Digital Maturity: Digirati


Addi’s Related Competitors



Addi’s Business Model Canvas


Addi’s Key Partners
  • Acquiring bank
  • Retail chains
  • Financial companies
Addi’s Key Activities
  • Marketing
  • Community Building
  • IT development
  • System Architecture
  • Platform Management
  • Networking
  • Alliances
  • Books
  • Support
  • Quality Control
  • IT operations
Addi’s Key Resources
  • Qualitative data from chat provided by bots
  • Software
  • To be a developer to build a bot
  • To integrate into the platforms
  • To digitalize a set of APIs to allow for the businesses to connect
Addi’s Value Propositions
  • Diversified Financial help
  • "Buy now Pay later" solution for customers
  • A suite of white-labeled products and services designed to help businesses to grow by offering a line of credit to your customers
  • Retailers get a frictionless integration that enables them to offer both financing and a seamless checkout experience to their customers
  • Customers get a point of view when applying for credit while using a generic account which is valid in all affiliated stores
Addi’s Customer Relationships
  • Platform
  • Embedded
  • Integrations
  • APIs
Addi’s Customer Segments
  • Retailers
  • Affiliated companies
  • Mass consumers
Addi’s Channels
  • Website
  • E-mail [email protected]
  • Platform Agreements
  • Affiliates
  • Targeted ads
  • Call center
  • Branches work as customer acquisition and as recovery
  • Twitter
Addi’s Cost Structure
  • Chatbot with AI
  • Marketing
  • App development
  • Platform maintenance
  • Operations
  • Team
  • Customer Service
  • Legal
Addi’s Revenue Streams
  • Interest on credit
  • Fees
  • Commissions

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Addi’s Revenue Model


Addi makes money by combining different business models. Below, you will find the list of the different monetization strategies identified for this company:

  • Brokerage
  • Transaction facilitator
  • Two-sided market
  • Digital transformation
  • Disruptive banking
  • Easy and low-cost money transfer and payment
  • Finance get makeover
  • Microfinance
  • Online marketplace
  • Technology trends
  • User design
  • Mobile first behavior
Analytics


Market Overview
  • Patterns
  • Sectors
  • Categories
  • Companies
  • Right click on the nodes to explore

Addi’s Case Study


Addi's CASE STUDY

Introduction

In the bustling heart of Bogotá, a revolution in financial technology has been quietly unfolding. We, at Addi, embarked on a mission in 2018 to transform the digital credit market in Latin America. Our vision was ambitious: to democratize access to financial services, making credit available instantly and conveniently at points of sale, both online and offline. The journey we've undertaken is filled with lessons, challenges, and triumphant milestones worth chronicling.

Revolutionizing Financial Services

Addi’s inception was born out of a pressing need: over 50% of Latin America’s population remains underserved by traditional banking systems (World Bank, 2021). The existing credit landscape was ripe for disruption, and we knew that the confluence of machine learning, big data analytics, and mobile technology could turn the tide. Our founders, believing firmly that financial inclusion is a catalyst for social and economic growth, set out to build a platform that could bridge this pervasive financial gap. Unlike conventional lenders, Addi does not rely on physical branches or lengthy paperwork. Instead, we leverage advanced algorithms and qualitative data from various digital touchpoints to assess creditworthiness in real-time. This approach not only speeds up the loan approval process to mere minutes but also opens doors for individuals who have been historically excluded or penalized by traditional credit scoring systems.

Our Unique Business Model

The core of Addi’s business model revolves around providing instant credit at the point of sale, making the shopping experience seamless and accessible for consumers. Picture this: a customer walks into a store, picks out the item they need, and upon reaching the checkout, they have the option to apply for credit through Addi. Within seconds, they receive a decision, complete with the terms of their loan, enabling them to walk out with their purchase right away. This model creates a win-win scenario: consumers benefit from immediate purchasing power without undergoing a cumbersome loan process, while merchants enjoy higher sales conversion rates by offering flexible payment solutions. Additionally, the entire process is facilitated digitally, simplifying operational procedures and costs for merchants. Our revenue streams are dual-faceted: we charge interest on the loans issued, calculated based on individual risk profiles evaluated by our proprietary credit scoring system. Secondly, we receive commission fees from merchants for every loan facilitated through our platform. This dual income stream ensures both sustainability and growth.

Technological Edge and Operations

Our technological sophistication is a major differentiator. Addi integrates seamlessly with merchant POS (point of sale) systems through an extensive suite of APIs, ensuring minimal friction during the credit application process. Our backend utilizes a robust architecture that includes advanced machine learning models capable of evaluating large datasets in real-time, a feature alluded to by Forrester Research as integral for modern financial services (Forrester, 2022). To facilitate these capabilities, our team is a blend of talents encompassing IT development, system architecture, data science, and customer support. Our digital-first approach, paired with strategic alliances with retail chains and financial companies, has empowered us to rapidly scale and provide consistent, high-quality service.

Credit for All: Democratizing Finance

Perhaps the most profound impact of Addi’s model is the empowerment it provides to individuals. Customers who were once sidelined by conventional banks now have a pathway to financial inclusion. By offering competitive interest rates and flexible terms, we ensure that credit is not only accessible but also affordable. This has been instrumental in fostering economic empowerment among underserved communities in Latin America. Our focus on social impact is deliberate and driven by data. Reports suggest that financial inclusion can boost GDP by up to 14% in developing economies (McKinsey Global Institute, 2020). At Addi, we see tangible results in the stories of our customers who, through our credit solutions, have been able to finance their education, manage healthcare expenses, or simply improve their quality of life.

Success Stories and Market Expansion

One of our notable successes is the partnership with prominent retail chains across Colombia. By integrating our services at their points of sale, we’ve seen an average increase in sales of 20% among these partners (Addi Internal Data, 2023). Moreover, customer satisfaction surveys consistently reveal high ratings for the convenience and speed of our credit process. As we look to the future, our eyes are set on expanding beyond Colombia. With plans to enter other Latin American markets such as Mexico and Brazil, we aim to replicate our success while adapting to the local financial climates and regulatory landscapes. The demand for innovative and accessible credit solutions remains high, and we are poised to meet it.

Conclusion

Addi’s journey is a testament to the power of innovation in transforming traditional sectors like finance. By leveraging cutting-edge technology and a deep understanding of the local market, we’ve created a platform that not only meets the immediate needs of consumers but also drives long-term economic development. As we continue to grow and evolve, our mission remains clear: to democratize financial services in Latin America and beyond. In the words of Bill Gates, technology is just a tool, but it’s the elevation of human ability that truly matters. At Addi, we harness technology to empower individuals, thus transforming lives and communities. Our story is ongoing, and we invite you to follow along as we continue to break barriers and redefine what’s possible in the world of digital finance.


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