Bangalore-based startup Khatabook has raised $25 million in Series A funding from GGV Capital, Partners of DST Global, RTP Ventures, Sequoia India, Tencent, Y Combinator and others, along with more than 20 angel investors, as reported on Tuesday (Oct. 1).
The nine-month-old firm aims to help businesses in India digitize their bookkeeping and accept online payments using an Android-based app. More than five million merchants from over 3,000 cities have signed on, according to Co-founder and CEO Ravish Naresh. The app supports 11 languages.
“As soon as we launched the app, we instantly started to go viral,” Naresh said. “These shopkeepers and roadside vendors have an internet-enabled smartphone; they are just not using it in their businesses. All they needed was a simple-to-use app.”
The company has grown 20 percent weekly, and businesses recovered $5 billion in previously unpaid credits in six months, Naresh said.
“At Khatabook, we have taken early but significant steps toward leveraging this trend to digitize India’s shopkeepers,” he said. “For most of our merchants, we are the first business software they’ve used in their entire life. And we will continue to build more India-first innovations to further enable the growth of what is still a largely untapped sector.”
The new funds will be used to build out new features, such as billing and invoicing.
The movement away from cash in India is an inexorable one, aided by a government mandate, a confluence of technology and stakeholders (from banks to payment service providers), and a greenfield of more than one billion consumers willing and able to pay digitally.
India still remains a cash-intensive economy, where 90 percent of transactions are still done through hard currencies. That said, the evolution has been rapid, from a standing start only three years ago. Some projections estimate that by the end of 2020, the equivalent of $500 billion in transactions will be done electronically, representing 15 percent of the gross domestic product (GDP).