Khatabook, a Bengaluru-based startup, is transforming the way small businesses in India manage their finances. By offering a digital ledger and payment platform, Khatabook enables these businesses to easily record financial transactions and accept online payments, helping them streamline operations and boost efficiency in the digital age.
Despite tens of millions of Indians coming online in recent years, most businesses in the country remain offline, relying on traditional notebooks to track financial transactions. A Bengaluru-based startup, Khatabook, is changing that by helping small businesses digitize their bookkeeping and accept online payments. Recently, Khatabook secured a substantial funding round to expand its operations.
Khatabook offers a mobile app that assists small shopkeepers and Kirana store owners in managing their finances through a digital ledger, which tracks money owed to them. The app sends payment reminders via WhatsApp and SMS, replacing the traditional practice of noting transactions in physical notebooks.
The app, designed with regional language support and even a “Hinglish” option, has achieved significant milestones, including crossing $1 billion in transactions, 1 million downloads, and onboarding over 400,000 businesses in just a year. This growth is remarkable, considering the platform had only 40,000 merchants a year and a half ago.
Khatabook’s success can be attributed to its founders’ deep understanding of the challenges faced by small-town merchants. The founding team hails from tier 2 cities across India, with backgrounds in family-run businesses. This first-hand experience has been crucial in developing a product that resonates with the needs of small merchants, a market largely untapped by previous utility apps.
The idea for Khatabook emerged in 2016 when Ravish Naresh and his college friends launched Kyte.ai, a digital spend management app. They realized that many first-time online users still relied on traditional khata (ledger) books rather than digital transactions. This insight led them to create Khatabook in 2018, focusing on helping small shopkeepers manage their transactions and track repayments. The app’s SMS updates and payment reminders have resulted in a 3X faster return on credits for users.
Khatabook recently raised $25 million in Series A funding from investors including DST Global, GGV Capital, Sequoia India, Tencent, and others. With this new funding, the total raised by Khatabook now stands at $29 million. The startup is also part of the first cohort of Surge, Sequoia India’s rapid scale-up program for early-stage startups in India and Southeast Asia. Y Combinator and Info Edge are also investors in Khatabook.