In a world where the answer to any question is available over the internet, people no longer bother to uphold material sources of information. A virtual medium has various benefits which makes it a more reliable method of preserving data. It takes up no physical space, it has vast storage capacity, and you can effortlessly search through it to find what you need. As a result, all companies and businesses have started digitalizing their financial records, economic observations, and other information. Khatabook is a platform that lets you keep account of all your business and personal registers.
For a long time, shopkeepers and small merchants in India used to keep their records jotted down in a notebook. Khatabook provides a digital ledger through which they can keep track of their due payments and the money owed to them. Updating business transactions on Khatabook takes much less time and effort than writing it down. The merchants can keep track of the credit and debit information regarding any customers across numerous businesses.
The app sends a text message through WhatsApp or SMS to remind the merchants about the due date. Khatabook acknowledges the diversity in our country and is therefore available in more than ten languages and even in Hinglish. Ever since the app was launched in 2018, Khatabook has been helping shopkeepers and Kirana store owners to make their transactions more convenient. UPI payments are no longer carried out in just metropolitan areas but also by small scale salespeople. Within a year, the app had around 7 million enrollments and 3 million active users. Khatabook has its most prominent group of consumers from Pune, Hyderabad, Jaipur, Ahmedabad, New Delhi, and Patna. The app has also attained downloads from shopkeepers in Pakistan, Nepal, and Bangladesh
The founders of Khatabook
Khatabook (1) was initiated in Bangalore by Ravish Naresh, an IIT Mumbai alumni from Meerut, Uttar Pradesh. He was also the co-founder and COO of Housing.com. The company has more co-founders including Jaideep Poonia from Hanumangarh in Rajasthan whose family had a long background in the pesticide business. It was Vaibhav Kalpe from Nanded, a city in Maharashtra, who originally built Khatabook. He created his experience in this field by working at his father’s electrical shop. The other founders are Ashish Sonone from Bilaspur, Chattisgarh, and Dhanesh Kumar from Jehanabad, Bihar.
The idea was born because all the founders behind it came from a background of business and shopkeeping. They had already experienced the problem that they were trying to solve, and that is precisely what is required to become a great entrepreneur. This empathy helped them to come up with the right product for the audience they were targeting. Moreover, India had never before witnessed such an app that was made especially for the small scale businesses. Other circumstances such as demonetization and the government’s enthusiasm towards digitization also inspired them to start Khatabook.
Early growth and strategies
Khatabook employed a very unusual advertising strategy. Unlike other business-related apps that focused on revenue through downloads, Khatabook trusted the power of word-of-mouth promotions. The shopkeepers tend to rely on the recommendation of a fellow merchant more than an advertisement that catches their eye. The rapid increase in Internet usage all over India also helped more merchants to use Khatabok. They never intended to make revenue from the payments since their customers were a group that is very sensitive to the expenses.
The benefits and amenity of Khatabook effectively spread to a more massive crowd, and this mode of customer acquisition turned out to be very successful. Khatabook soon had various users from Kirana shops, travel agencies, and mobile recharge shops. They also expanded their services to include billing, invoicing, GST calculation, and inventory management. What makes Khatabook unique is its focus on the deeper regions of society. The app even has users from Port Blair in Andaman and Nicobar islands.
Within a couple of months after establishing the business, Khatabook was able to collect 4 million dollars through funding. Around the same time, Sequoia commenced a startup accelerator, and incubation project called Surge. Khatabook was one of the first associates shortlisted under this program. The two incentives were attained around the same time, which helped Khatabook to grow.
Later, they carried out a series A funding in September 2019, led by GGV Capital, Partners of DST Global, Sequoia India, and Tencent in which they were able to raise 25 million USD. Many other angel investors also took part in this funding including Amrish Rau, Anand Chandrasekaran, Deep Nishar, Gokul Rajaram, Jitendra Gupta, Kunal Bahl, and Kunal Shah. In March 2020, Khatabook announced a partnership with world-famous cricketer and former Indian captain MS Dhoni. Dhoni not only invested in Khatabook but also became its brand ambassador.
In a very recent series B funding led by B Capital, Khatabook raised a whopping 60 million dollars. This round of funding also saw participation from the company’s current investors Sequoia Capital, Partners of DST Global, Tencent, GGV Capital, RTP Global, etc. So far, Khatabook has raised 87 million US dollars across several rounds of funding. They plan to improve their financial assistance and market capacity using this latest investment.
Vision for the future
Khatabook has a wide fan-base of around two crore merchants who rely on the app for their daily trades. They serve over 500 types of businesses across 5000 cities in India. In the year 2019, they had a significant transaction of over INR 3.7 lakh crores. Over the next 12 months, they are aspiring for an expansion of their product portfolio and another two crore registrations on their platform. They are working on improving their technology and capabilities.
Khatabook hopes to build more skills, dependability, and loyalty among its consumer masses. They will also create a distribution platform that will be focused on the customers. They intend to work with the government and financial organizations as well as assist small and medium enterprises in improving their business. With the recent lockdown and its resultant effects on the shopkeeping sector, more merchants are now prompted to move their business online. Turning to this digital platform can help them to stay in the trade now and in the post-lockdown era.