Khatabook, a startup that’s helping merchants in India digitize their bookkeeping and accept online payments, mentioned on Tuesday it has raised $100 million in a brand new financing spherical because it prepares to launch monetary providers.
The startup’s new financing spherical — a Sequence C — was led by Tribe Capital and Moore Strategic Ventures and valued the two-and-a-half-year-old Bangalore-headquartered startup at “near $600 million,” its co-founder and chief govt Ravish Naresh advised TechCrunch in an interview.
As a part of the brand new spherical — which was oversubscribed and in addition noticed participation of Balaji Srinivasan and Alkeon Capital in addition to many different current buyers together with Sriram Krishnan, B Capital Group, Sequoia Capital, Tencent, RTP Ventures, Unilever Ventures, and Higher Capital — Khatabook mentioned it’s also shopping for again shares value $10 million to reward its present and former staff and early buyers. The startup mentioned it’s also increasing its inventory choices pool for workers to $50 million
At the same time as a whole lot of hundreds of thousands of Indians got here on-line up to now decade, most retailers within the South Asian nation are nonetheless offline. These retailers, who run neighborhood shops, depend on conventional methods for bookkeeping — sustaining ledgers on paper — which can be each time-consuming and susceptible to errors.
Khatabook is making an attempt to vary that by offering these retailers with a set of merchandise to digitize their bookkeeping and handle their bills and employees. The startup, which employs over 200 individuals, mentioned it has amassed over 10 million month-to-month lively customers who’re unfold throughout almost each zip code within the nation.
Scores of companies from younger startups similar to Khatabook and Dukaan to Fb, Amazon and India’s largest retail chain Reliance Retail are aggressively making an attempt to faucet into neighborhood shops within the South Asian market.
There are about 60 million small and medium-sized companies in India, a fraction of that are neighborhood shops — additionally popularly often known as kirana in South Asia — that dot tens of 1000’s of Indian cities, cities, and villages. These mom-and-pop shops provide all types of things, pay low wages and little to no lease. And on high of that, their economics is commonly higher than most.
“At Tribe, we imagine strongly within the energy of the community impact and the way it can create moats for companies. Khatabook has efficiently constructed such a community by empowering this seismic shift amongst MSME companies to maneuver from paper to digital, actually,” mentioned Arjun Sethi, co-founder and associate at Tribe Capital, in an announcement. “Regardless of its massive early success and quick adoption so far, the corporate is early in its path to energy the phase. We’re thrilled to be part of its development because it leverages its community to construct further scale.”
Khatabook, which additionally counts Emphasis Ventures (EMVC) amongst its backers, has expanded its product choices lately to lure extra companies. Later this yr, Naresh mentioned, the startup will present lending to retailers. “We’re at present testing the product with each retailers and distributors,” he mentioned.
On-line lending has boomed in India lately, however only a few corporations are right now making an attempt to cater to small- and medium-sized companies. “The unaddressed SME credit score demand in India is ~$300-$350 billion, with greater than 90% of present demand being met by banks. A typical digital SME lender focusses on 1-5 million Indian rupees ($13,575 to $67,875) ticket measurement with no collateral, common tenure ~12-18 months, and with some ecosystem anchor,” analysts at Financial institution of America wrote in a report.
As with scores of different companies, the pandemic was not excellent news for Khatabook, which misplaced a good portion of the enterprise final yr after Indian states enforced lockdown to limit mobility. However the startup has since bounced again. The month of July, mentioned Naresh, was its all-time excessive. “MSMEs have come again very strongly and companies weren’t as impacted by the second wave this yr as they have been by final yr’s,” he mentioned.