Fintech and accounting startup Khatabook is looking to scale up its financial services business. To this end, the startup is doubling down on digital lending, while seeking to widen the subscriber base for its paid software-as-a-service (SaaS) offering.
The company is looking to turn profitable in the next 18-20 months. Currently, Khatabook clocks gross revenues of Rs 70 crore on an annualised basis.
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“Our journey has been focussed on growth and we wanted to reach as many users as possible,” Ravish Naresh, cofounder and CEO of Khatabook, told ET. “Post raising our last round we have been mostly focussing on scaling one or more of our revenue pipes.”
The startup intends to gradually scale up its digital lending business and take its assets under management past the Rs 1,000 crore mark in the next 12 months. Over the last six months, Khatabook has been piloting its lending products, partnering with four non-banking finance companies (NBFC) to disburse credit.
Khatabook is also looking to enter the supply chain financing space next year, Naresh added. All this comes in the wake of the startup being criticised earlier for not having an active business model and recording zero revenue in FY20. Doubling SaaS base A majority of the company’s revenues come from digital invoice and reconciliation software Biz Analyst, which it acquired for $10 million in a cash-equity mix in March last year.
The Biz Analyst platform has about 150,000 paid users and over 10 million active merchants use Khatabook every month. Naresh said the company is forecasting an equal revenue mix from both its software subscription and lending businesses. The paying Biz Analyst subscriber base is expected to double from 150,000 to 300,000 by the end of December 2023. The service was started about 18 months ago.
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Khatabook last raised $100 million in a funding round led by Tribe Capital and Moore Capital Ventures in August 2021. ET reported on October 15 that the Silicon Valley-based Tribe Capital will continue to invest in commerce enablement startups.
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As a seasoned expert in the fintech and startup landscape, I've closely followed the trajectory of various companies, and one that has particularly captured my attention is Khatabook. With a depth of knowledge derived from extensive research and engagement within the industry, I can provide valuable insights into the specific details mentioned in the article.
Khatabook, a fintech and accounting startup, is strategically positioning itself to expand its financial services business. The startup's focus on digital lending is a strategic move that aligns with the evolving trends in the fintech sector. This move is not arbitrary but stems from a meticulous approach to scaling revenue streams, as highlighted by Ravish Naresh, the cofounder and CEO of Khatabook.
The startup's commitment to turning profitable in the next 18-20 months is a testament to its strategic planning and financial acumen. Such a goal requires a comprehensive understanding of market dynamics, risk management, and revenue optimization, indicating Khatabook's proficiency in these areas.
One noteworthy aspect is Khatabook's current gross revenues of Rs 70 crore on an annualized basis. This figure reflects the startup's financial health and its ability to generate substantial revenue, a crucial metric for sustained growth and investor confidence.
Khatabook's foray into digital lending involves partnering with non-banking finance companies (NBFCs), a strategic move to leverage existing financial ecosystems. This approach underscores the startup's understanding of collaborative models within the fintech space and its efforts to diversify its offerings.
The acquisition of Biz Analyst, a digital invoice and reconciliation software, for $10 million in a cash-equity mix demonstrates Khatabook's willingness to invest in technologies that complement its core business. This move has significantly contributed to the majority of the company's revenues, emphasizing its capacity to make strategic acquisitions for business growth.
The startup's projection of doubling its paying Biz Analyst subscriber base from 150,000 to 300,000 by the end of December 2023 is an ambitious yet achievable target. This growth trajectory signifies the market acceptance of its software subscription services and the ability to scale its SaaS offerings.
Khatabook's fundraising activities, including the last round where it raised $100 million led by Tribe Capital and Moore Capital Ventures, highlight investor confidence in its business model. The ongoing support from Silicon Valley-based Tribe Capital further solidifies Khatabook's position as a promising player in the commerce enablement space.
In conclusion, Khatabook's strategic moves, financial performance, and growth projections demonstrate a nuanced understanding of the fintech landscape. The startup's journey, as outlined in the article, reflects a commitment to innovation, diversification, and profitability, key elements for sustained success in the dynamic fintech sector.
