From Startup to Market Leader: The Success Story and Business Model of Instamojo
By Nishat Manzar
Wednesday, January 31, 2024
In the ever-evolving world of entrepreneurship, few stories resonate as profoundly as that of Instamojo. Founded with a vision to empower small businesses and individual entrepreneurs, Instamojo has transformed the e-commerce and fintech landscape in India.
Instamojo Success Story
Overview
Instamojo was established in 2012 by Harshad Sharma, Sampad Swain, Aditya Sengupta, and Akash Gehani. Currently, Sampad Swain leads the company as CEO, while Harshad Sharma has since departed. Based in Bangalore, Instamojo operates as a digital payment portal and e-commerce platform, specializing in online merchandise sales and digital transactions, thereby streamlining billing and distribution processes.
The platform enables anyone with a bank account to participate in the digital marketplace, facilitating both sales and purchases online. Its user-friendly interface supports a wide range of users, underscoring its commitment to accessible and efficient digital commerce services.
Features of Instamojo
Instamojo stands out for its user-friendly and accessible platform, characterized by:
- Effortless Setup: Instamojo offers a quick and uncomplicated setup with no charges or extensive documentation required.
- Diverse Payment Options: The platform supports transactions through major credit and debit cards, net banking, and various electronic channels like email, SMS, and WhatsApp.
- Versatility: Instamojo caters to various business needs, including digital data, event passes, services, subscriptions, and physical goods.
Business Model
Instamojo has emerged as a leading payment platform in India, offering innovative transaction facilitation. Unlike traditional payment websites that charge nominal fees, Instamojo provides services free of charge. Operating as a peer-to-peer (P2P) platform, it facilitates instant transactions with a simple setup requiring address and ID proof for account approval. This approach has made Instamojo a valuable resource for freelancers, individuals, and small business owners.
Upon activation, users create personalized payment links that integrate seamlessly into websites, blogs, and products. Payments are reflected in sellers’ accounts within three days, with a nominal fee of about 2% plus tax, making Instamojo a cost-effective and user-centric solution for online transactions.
Corporate Advancement
Instamojo boasts over one million registered users. Starting as a payment portal, the company has expanded to offer its flagship products. Notable enhancements include MojoXpress for logistical needs and MojoCapital for providing credit loans to sellers. These features reflect Instamojo’s commitment to comprehensive solutions for business operations and financial support.
Origins and Evolution
Entrepreneurial Genesis
Instamojo’s inception traces back to Sampad Swain’s challenges in collecting funds for his blogging site, InStartup.com. This idea evolved into Instamojo during discussions with the co-founders of DealsandYou, transforming from a side project to a full-fledged enterprise. Founded in September 2012, Instamojo was the brainchild of Sampad Swain and the DealsandYou co-founders.
Transformation into a Financial Services Provider
Instamojo has strategically repositioned itself as a comprehensive financial services provider, supporting MSMEs with logistics and leasing options. Features like ‘Priority KYC,’ ‘Sachet loans on Whatsapp,’ and ‘InstaCash’ enable merchants to transition online and access immediate financial assistance. Recognizing MSMEs as vital to India’s economy, Instamojo aims to foster their growth with robust payment solutions, market tools, and industry connections.
Growth Trajectory
In the wake of the COVID-19 pandemic, Instamojo has seen a 25-30% increase in overall website traffic. The education sector, computer accessories and services, B2B businesses, and grocery retail have all experienced significant growth. Instamojo has also seen a sixteen-fold increase in travel volume and a threefold rise in travel company transactions. With plans for international expansion, Instamojo is actively recruiting experts in technology, product development, and architecture to sustain innovation and excellence.
Mission
Instamojo is driven by a mission to empower individuals and businesses through the strategic use of the Internet.
Challenges
Overcoming Adversity
Despite raising over 30 crores from investors and serving 3 lakh companies across India, Instamojo faced potential closure in 2017 due to fundraising challenges and investor withdrawal post-demonetization. The company secured Rs. 1.6 crores from Kalaari Capital to sustain operations temporarily but faced financial difficulties again by mid-2017. Cost-cutting measures and a new funding round from Japanese payments company AnyPay helped Instamojo avert shutdown, enabling further expansion and new feature introductions.
Conclusion
Instamojo’s success story is one of resilience, innovation, and strategic evolution. From its inception in 2012, the company has empowered small businesses and individual entrepreneurs, reshaping India’s digital commerce landscape. Under Sampad Swain’s leadership, Instamojo continues to thrive, demonstrating robust growth and a commitment to fostering the success of MSMEs.