The process of accounting and bookkeeping goes a long way back, and even as science and technology have been propelled to the forefront to lead humanity into the future, the importance of this process remains undiminished. However, advancements in technology have not trickled down to small business owners in India, many of whom continue to manage accounts by hand. Leading fintech start-up Khatabook has been working to aid them to digitize their bookkeeping methods and open up to online payments. Today, the company has announced that it has raised $100 million in its latest Series C funding round led by US-based venture capital firms Tribe Capital and Moore Strategic Ventures (MSV).
The funding round, which was a mixture of primary and secondary capital, included participation from Alkeon Capital and existing investors B Capital Group, Sequoia Capital, Tencent, RTP Ventures, Unilever Ventures, and Better Capital, as well as former and current partners of Andreessen Horowitz including Balaji Srinivasan and Sriram Krishnan. Post the funding round, Khatabook was valued at $600 million.
“The first phase of our journey was enabling digital transformation by building a tech ecosystem for Indian MSMEs. Now that we have created a widely accepted digital platform, the next step will be digitally-enabled financial services for small businesses,” said Ravish Naresh, CEO, and Co-founder, Khatabook.
“In the next phase, the focus will be financial service disbursement through the tech platforms. The financial services on the Khatabook platform will digitally foster lending, payment, and deposits related efficiencies in the ecosystem,” the start-up said.
The Bengaluru-based Khatabook plans to deploy the funds towards the disbursement of financial services through its software ecosystem, catering to 10 million monthly active MSMEs, as well as to accelerate hiring to strengthen its engineering, product, design, analytics, and data science capabilities, thereby strengthening its talent base.
Additionally, Khatabook will be buying back $10 million worth of employee stock ownership plan (ESOP) shares in a move to reward its current and former employees and early investors. Eligible employees will be able to sell as much as 30% of their vested options, and Khatabook’s ESOP pool has been expanded to $50 million.
Khatabook, with more than 200 employees and over 10 million monthly active users across all its software products, has experienced year-on-year growth of 150% for the financial year ending March 31, 2021. Founded by Ashish Sonone, Dhanesh Kumar, Vaibhav Kalpe, Jaideep Poonia, and Ravish Naresh, it is known for helping kiranas and enabling micro, small and medium enterprises (MSMEs) to increase efficiency and recover dues with the help of its Khatabook app.
The app shares reminders via WhatsApp and SMS when money is due to be collected or paid, manages Business and Personal ledgers, and helps businesses keep a digital log of their financial transactions and accept online payments.
Its staff and salary management platform Pagarkhata and expense management platform Cashbook have aided in its goal.
Earlier this year, it acquired software-as-a-service (SaaS) accounting software Biz Analyst, for $10 million to offer premium value-added services like on-demand access to sales, purchase, and inventory management.