On Tuesday, Khatabook has confirmed that it has closed a funding event of $100 million. The startup is planning to launch more financial services for its clients. Currently, it helps merchants to digitize their bookkeeping and managing staff online.
Details about the $100 Million Funding Round
Khatabook has established itself as one of the favorites for merchants who want to digitize their bookkeeping services. It also helps the merchants in online payment as well as staff management. In a recent announcement on Tuesday, the firm has revealed that it has received $100 million in its series C funding round led by Tribe Capital and Moore Strategic Ventures.
Khatabook’s co-founder and chief executive Ravish Naresh told TechCrunch in an interview that the current financing event has also helped the firm to reach a valuation of around $600 million. The fintech startup has its headquarter in Bangalore and was launched two-and-a-half-year back.
The new round also recorded participation from new investors including Balaji Srinivasan and Alkon Capital as well as many other existing investors Sriram Krishnan, B Capital Group, Sequoia Capital, Tencent, RTP Ventures, Unilever Ventures, and Better Capital, as per KhataBook’s official statement.
Khatabook also stated that the firm is buying back its shares worth $10 million to reward its current and former employees and early investors. The startup said it is also expanding its stock options pool for employees to $50 million
Khatabook Operations and Growth
India recorded an exponential surge in terms of digitization during the last ten years. But, most merchants still rely on traditional methods to handle their businesses. These South Asian merchants are still using pen-paper to record their business activities. This method is not only time-consuming but is also prone to errors.
Khatabook has brought revolutionary products for such merchants. It helps them to digitize their bookkeeping and expenses reports including staff management.
The startup claims to have 200+ staffs that are helping 10 million monthly active users on its platform. The firm provides services all over India.
Scores of firms from young startups such as KhataBook and Dukaan to Facebook, Amazon, and India’s largest retail chain Reliance Retail are aggressively attempting to tap into neighborhood stores in the South Asian market.
Talking about the current investment in Khatabook, Arjun Sethi, co-founder, and partner at Tribe Capital said, “At Tribe, we believe strongly in the power of the network effect and how it can create moats for businesses. Khatabook has successfully built such a network by empowering this seismic shift among MSME businesses to move from paper to digital, literally,”
He further added, “Despite its large early success and fast adoption to date, the company is early in its path to power the segment. We’re thrilled to be a part of its growth as it leverages its network to build additional scale.”
Naresh also revealed Khatabook’s plans to start new financial services including lending.
The online lending business is on a boom in India. Recently, Cred has also launched a community-based product named CRED Mint to provide online lending services among its Cred users.
But, small-medium-sized businesses are not getting that many online lending opportunities. As analysts at Bank of America wrote in a report, “The unaddressed SME credit demand in India is ~$300-$350 billion, with more than 90% of current demand being met by banks. A typical digital SME lender focusses on 1-5 million Indian rupees ($13,575 to $67,875) ticket size with no collateral, average tenure ~12-18 months, and with some ecosystem anchor.” Khatabook plans to reduce this online lending gap among MSMEs with its new financial services.