Khatabook - Reducing the Burden of Accounting

Sarika Anand Sarika Anand
Sep 3, 2021 11 min read
Khatabook - Reducing the Burden of Accounting

Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Khatabook.

In our haphazard daily life, we tend to get busy with several things and forget about payments and maintaining a log of all the financial transactions, and it sometimes may seem very hectic. Today, we have an option to rely on effective business management software as it keeps a log of our due dates and also very effectively manages, the digital logbook of online transactions we make.

With the use of business management application software, like Khatabook, you don't need to worry about forgetting the due dates of payments to be made. Khatabook is the World's Fastest-growing SaaS company. Khatabook reminds you through WhatsApp or SMS when the money is due to be paid or collected. Kyte Technologies is the Parent Company of Khatabook.

Discover more about the Journey of Khatabook along with knowing Khatabook's Business Model, Founder, Revenue, Success story, Funding, Parent Company, Competitors, Growth & more.

Khatabook - Company Highlights

Startup Name Khatabook
Parent Company Kyte Technologies
Headquarters Bangalore, Karnataka, India
Industry Fintech
Founded January 2019
Founders Ashish Sonone, Dhanesh Kumar, Vaibhav Kalpe, Jaideep Poonia, and Ravish Naresh
CEO Ravish Naresh
Area Served India
Revenue 0 (FY20)
Net Profit/(Loss) INR -126.6 crore (FY20)
Valuation $600 million (August 2021)
Total Funding USD 190 Mn (as of 2021)

Khatabook - About and How it Works?
Khatabook - Logo and its Meaning
Khatabook - Recent News
Khatabook - Founder and History
Khatabook - Mission
Khatabook - Business Model
Khatabook - Revenue and Growth
Khatabook - Funding and Investors
Khatabook - Competitors
Khatabook - Challenges Faced
Khatabook - Future Plans
Khatabook - FAQs

Khatabook - Recent News

August 24, 2021 - Khatabook concluded its Series C round of funding with a fundraise of $100 million led by Tribe Capital, Moore Strategic Ventures, Alkeon Capital, B Capital Group, Sequoia Capital, and more.

February 3, 2021 - Khatabook releases its 2020 statistics. In 2020, ย Khatabook activated merchants in >95% Indian districts, recording over $100Bn+ in transactions with over 150Mn+ customers

January 13, 2021 - Out of the 7 Indian startups in Y Combinator's latest top companiesโ€™ list, Khatabook is one among them. India has emerged as an important market for Y Combinator.

May 20, 2020 - Indiaโ€™s Khatabook raises $60 million to help merchants digitize bookkeeping and accept payments online.

Best Indian Payment Gateways in 2020 | Payment Gateways for Business
A payment gateway is a merchant service that connects the usersโ€™ bank accountwith the platform where the users need to transfer their money. A bank mayprovide payment gateway to its customers, there is also a specialized financialservice provider such as payment service provider which provides paโ€ฆ

Khatabook - About and How it Works?

Founded in January 2019, Khatabook is the world's fastest-growing SaaS company. It has become India's leading business management app for MSMEs with 20M+ downloads in a remarkably short period of time. It operates the Android-based Khatabook app that enables companies keep a digital log of their financial transactions and accept payments online.

This Bangalore-based mobile app service shares WhatsApp and SMS reminders to users, when money is due to be paid or collected. Khatabook enables micro, small and medium merchants to track business transactions safely and securely. The app is available in over 13 vernacular languages catering to a diverse audience in the country.

It manages our Business & Personal ledgers on our phone and computer and reminds us through SMS or WhatsApp about our due dates which can be called an asset or boon due to digitalization of our 'Khatabook'.

The app has a free โ€˜Payment Remindersโ€™ feature. With this feature, an automatic SMS is sent to your customers every time a transaction is recorded. This digital ledger app is safe and secure to use. Khatabook lets you keep all details of credit-debit for any number of customers across multiple businesses ready and handy on your phone. In short, this app lets merchants do stress-free business.

Khatabook - Logo and its Meaning

Khatabook's company logo very much signifies what the company is all about. Khatabook maintains a digital record of all the transactions we make, something which our actual 'Khatabook'(the diary in which we maintain our financial record) does.

Khatabook Business Model
Khatabook Logo

Khatabook - Industry Details

Khatabook activated merchants in >95% Indian districts with 150Mn+ Customers. Based on the Indian MSME Data, Khatabook conducted a research and analysis on the credit behavior of people across the country and also the impact of Covid 19 on small businesses.

Here's a chunk of what they found:

  • Business volumes on credit are 45% higher for South Indian states vs the national average
  • Credit given out by Khatabook merchants dropped by 40% in the initial Covid months. It has continued to recover to 80% of pre-pandemic levels by December.
  • Average days to recover debts increased by 25% during COVID for Khatabook Merchants
  • Sectors like Travel, construction, apparel were more impacted during 2020

Khatabook - Founder and History

Founded by Ashish Sonone, Dhanesh Kumar, Vaibhav Kalpe (not serving now), Jaideep Poonia, and Ravish Naresh in 2019, Khatabook helps small business owners to manage their business and personal credits.

Founders of Khatabook
Khatabook Founders & team

The story goes back to 2016, when Ravish Naresh along with his team of college friends, started a digital spend manager app, The app helped users understand their expense patterns using their SMS alerts. initially had good traction, but it did not reach the expected growth scale. Also, the team realized all their users were based out of metropolitan cities.

On researching, they found that first-time online users did not deal with digital transactions, and they still rely on traditional khata or ledger books. As per Ravish, they wanted to build something that people want and then try to build a business around it.

That is when the idea for Khatabook developed, and they started work on a simple cash management app and named it Khatabook. The Khatabook parent company is Kyte Technologies.

Khatabook - Mission

The mission statement of Khatabook says, "empowering udhari khata(book-keeping)".

"Started with a vision of transforming India's small shops, today we are the biggest player in the small business segment digitizing a sector that forms the backbone of our economy. We are looking to work closely with the government and financial institutions to strengthen our market leadership and help MSMEs increase their income while making them more efficient and competitive," Ravish Naresh, CEO of Khatabook, said.

Khatabook - Business Model

Khatabook is a Bangalore-based startup founded in 2019. Khatabook is a mobile app which help small merchants to digitize their accounting and credit balance recording. The company is designed to help reduce the burden of maintaining and accounting paper account books. It is just like having a khata in your pocket. The business model of Khatabook is making "Bharat" / India come online.

Its 100% free to use and safe and secure for all types of businesses with which shop owners can record credit(Jama) and debit(Udhaar) of customers. Khatabook has no revenue source at present.

Naresh says their focus is now on developing the app to provide a complete financial solution to small businesses. The startup has plans to bring a host of new features on to the platform and the next in line is UPI payment.

Khatabook has seen some growth in the past two and a half years, where it has emerged as an integral part of the MSME community in almost every district in India. A majority of the merchant users on the Khatabook platform have embraced the digital practices dumping their offline business practices.

Furthermore, Khatabook has also introduced 3 other solutions apart from the Flagship Khatabook for the benefit of the MSMEs:

  • Biz Analyst - This is a leading SaaS business management solution from Khatabook designed to offer premium value-added on-demand services like sales and purchase reports, livestock updates, and other MIS reports. Biz Analyst can be integrated with Tally ERP9 and allows an overall view of the business operations.
  • Pagarkhata - This is a staff management platform for businesses by Khatabook, which aims to help merchants to turn the staff attendance, payroll/wages, attendance updates, leaves, payments, and other processes digital.
  • Cashbook - Cashbook is another platform by Khatabook built as a cash handling and tracking solution. Furthermore, it also helps with cash sales and expense management.

MobiKwik Success Story - Business Model | Founders | Revenue | Funding | Competitors
Using a Mobile Wallet has now turned out to be a habit of many. Easy hassle-freepayment and no worries about hunting for change every time you purchasesomething probably is a major benefit of using a mobile wallet. While today manyinternational players are providing mobile wallet services in Indiโ€ฆ

Khatabook - Revenue and Growth

In 2020, ย Khatabook activated merchants in >95% Indian districts, recording over $100Bn+ in transactions with over 150Mn+ customers.

  • Khatabook recorded '0'(ZERO) operating revenue in FY20
  • Khatabook had 84.14% increase in its total expenses in ย FY20 i.e., Rs 127.21 cr
  • Khatabook's Losses intensified by 84.71% in FY20 i.e, Rs. -126 Cr
Khatabook Revenue and Financials
  • Khatabook has registered around 10 Mn monthly active users, and the numbers are growing.

Before the lockdown, the growth had an excellent trajectory, which did take a hit during the lockdown in line with other external factors. With the relaxation of the lockdown, the company started reviving the business at a steady pace. The revival has been faster with users in tier-2 and tier-3 cities of India.

As a very relevant offering for merchants in the pandemic, they also launched MyStore app to enable them to take their stores online in 15 seconds and continue doing business through their preferred communication channels.

Within a month over from the launch, more than 2.5 million merchants across India have installed MyStore. Khatabook also initiated work-from-home active, 24/7 call centre support for merchants. Currently the revenue model of Khatabook depends on their funding.

Khatabook - Funding and Investors

Khatabook has raised a total of USD 190 Mn in funding as of 2021. Their latest funding was raised on August 24, 2021 from a Series C round worth $100 million. Khatabook is funded by 29 investors in total. Tribe Capital and Moore Strategic Ventures are the most recent investors. The valuation of Khatabook is estimated to be around $600 Million.

Date Round Amount Lead Investors
August 24, 2021 Series C $100M Tribe Capital, Moore Strategic Ventures
May 20, 2020 Series B $60M B Capital Group
May 20, 2020 Series B - -
Oct 1, 2019 Series A $25M -
Apr 19, 2019 Seed Round $1.5M Surge

Khatabook - Competitors

The top competitors in Khatabook's competitive set are OkCredit, BharatPe, Instamojo, Simply Vyapar Apps Pvt. Ltd., PayMate, Razorpay, Obopay, Paytm and Working Papers.

Comparison between Indian digital payments system Instamojo and Razorpay
As of today, 160 million unique digital payments users are found just in India,which accounts for about 13% of the population. In European countries, thepercentage is as high as 68%. The pandemic has further boosted the use ofdigital payments. This triggers a question, that being, โ€œWhich is the bโ€ฆ

Khatabook - Challenges Faced

In the initial days of Khatabook, like any other new startup, faced a shortage of money. According to the CEO, after they acquired Khatabook, they realized that they needed to look at some serious funding options.

In the series A phase, they were struggling a bit with the funding. The growth hit them fast, so the seed round took place in 5 bridges. It was the highest in the history of funding for Sequoia.

"Well, the struggles were mainly money-related. We knew we were working on something important and kept going with it. Often it was difficult to imagine the future of our initiatives with no funding, but perseverance is what got us where we are today," said Ravish Naresh, the CEO and Co-Founder of Khatabook.

He also said that the adoption of their product was not only dependent on the app's visibility and convenience but also on user education, not just for the app but also for using digital technology in general. The biggest hurdle was to persuade offline shopkeepers to come online and train them for digital transactions.

Switching away from the convention is understandably tricky and daunting for merchants who mainly have offline workflows. Persuading traditional enterprises to embrace the digital still remains a crucial challenge for them.

โ€œIt is important to build something that people want and then try to build a business around it, and that is exactly what the team did.โ€ says Ravish.

Khatabook - Future Plans

The company has plan to augment their service portfolio and drive a two- to three-fold growth in business by providing more relevant solutions and value to the users. Remaining committed to India's MSME segment, Khatabook will be adding services to streamline and simplify business processes for the merchants.

"Committing to a goal is essential for business directions and decisions. One thing that pandemic has taught us is that we need to think through the most unlikely scenario and make sure we are relevant in all possible scenarios or are agile enough to change our direction as per the need of the hour," says Ravish.

Khatabook has already managed to build a widely accepted tech ecosystem for the MSMEs across the country and will now concentrate on the disbursement of financial services through its tech platforms. These financial services will further enable smooth lending, payment, and deposits in the MSME space.

The financial services on the Khatabook platform will digitally foster lending, payment, and deposits related efficiencies in the MSME space.

Khatabook is eyeing the right partnership opportunities to seamlessly rollout the solutions that would benefit the economic aspirations of countless small businesses.

As we build financial services, we will be looking for the right partnership opportunities to enable the seamless rollout of solutions benefiting the economic aspirations of millions of small businesses.

Khatabook has announced a buyback scheme of ESOPs worth 10 Mn USD in order to acknowledge the contributions of its employees and reward them, the ex-employees and the early investors who stayed by the company and helped it grow. The employees who are eligible for the ESOP scheme would be able to sell up to 30% of their vested options. Meanwhile, Khatabook has also expanded its ESOP pool to $50 Mn.

Furthermore, Khatabook is also looking to strengthen its talent base by hiring employees for the engineering, product, design, analytics, and data science departments.

Khatabook - FAQs

Khatabook is from which country?

Khatabook is an Indian company.

How does Khatabook make money?

The Khatabook revenue model is non existent at the moment. Naresh says their focus is now on developing the app to provide a complete financial solution to small businesses.

What is the use of Khatabook?

Khatabook app that enables companies to keep a digital log of their financial transactions and accept payments online.

Who are the Khatabook app Founders?

Khatabook was founded by Ashish Sonone, Dhanesh Kumar, Vaibhav Kalpe (not serving now), Jaideep Poonia, and Ravish Naresh in 2019.

Who is the owner of Khatabook?

Kyte Technologies is the Parent Company of Khatabook. It was founded by Ashish Sonone, Dhanesh Kumar, Vaibhav Kalpe (not serving now), Jaideep Poonia, and Ravish Naresh.

Must have tools for startups - Recommended by StartupTalky

Subscribe to StartupTalky

Get the latest insights delivered to you right in your inbox

Great! Next, complete checkout for full access to StartupTalky.
Welcome back! You've successfully signed in.
You've successfully subscribed to StartupTalky.
Success! Your account is fully activated, you now have access to all content.
Success! Your billing info has been updated.
Your billing was not updated.