B Capital leads Series B for Indian bookkeeping start-up
B Capital has led a $60 million Series B round for Khatabook, a digital ledger software provider for micro, small and medium-sized enterprises (MSMEs) in India.
RTP Global, Hummingbird Ventures, Falcon Edge Capital, Rocketship.vc, and Unilever Ventures also came in as new investors. The company raised a $25 million Series A last year from DST Global, GGV Capital, Sequoia Capital India, Tencent Openspace, and Y Combinator China. These investors also took part in the latest fundraise. Khatabook was part of Sequoia’s inaugural group of start-ups backed by Surge, an accelerator program for Indian and Southeast Asian start-ups.
Founded in 2018, Khatabook ("Khata" is Hindi for account) helps MSMEs - typically neighborhood shops - preserve digital records of payments owed. It sends payment reminders to customers who can settle their accounts through online channels, thereby increasing business efficiency. Khatabook routes transactions through various payment service providers and receives a convenience fee for its efforts.
The company claims its app has been downloaded by more than eight million merchants, of whom one million are daily active users. There is a potential userbase of more than 50 million MSMEs that continue to transact in traditional ways. Khatabook will use the fresh capital to develop products and services for existing customers.
"Less than 50% of this sector (MSMEs) currently leverages the advantages of technology – something that is critical today for businesses to survive and thrive. We look forward to helping Khatabook build an enduring company, as they continue to serve millions of Indian MSME’s through the rapidly accelerating power of digitization,” said Amit Jain, a managing director at Sequoia.
The needs of MSMEs have come into focus in recent months as the Indian government launched several schemes to help them get access to affordable finance. It is also supporting non-banking financial companies (NBFCs), the primary backers of MSMEs. However, it is feared that a drastic fall in demand due to an eight-week countrywide lockdown could lead to widespread closures.
Other apps that offer a similar solution include Tiger Global Management-backed OkCredit, which also works with B2B users, and Paytm Business Khata, an in-app solution launched earlier in the year by India’s Paytm. At the same time, start-ups like e-commerce enabler LoveLocal (formerly m.paani), courier network aggregator Shiprocket, and logistics developer ElasticRun are looking to digitize MSMEs in different ways.
In India, B Capital is also an investor in B2B packaging marketplace Bizongo and scooter rental start-up Bounce.
More on South Asia
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.