Khatabook announced on Tuesday that it was able to raise $100 million in its new financing round. The startup mainly helps merchants to digitize their bookkeeping and accepting online payments.
The Series C financing round was led by Tribe Capital and Moore Strategic Ventures. The valuation of the two-and-a-half-tear-old startup has now reached close to $600 million as told by its co-founder and chief executive Ravish Naresh. The round was oversubscribed, and the startup attracted funds from Balaji Srinivasan and Alkeon Capital among many others. Khatabook has stated that it will buy back shares worth $10 million as a reward for its employees and early investors. It will also increase its stock options pool for employees to $50million.
Most merchants in India make their payments and bookkeeping offline even now. They fall back on traditional methods like keeping ledgers on paper for the same. It is considered an inefficient method nowadays. Khatabook is taking up the role of digitizing these by managing the bookkeeping and expenses of the merchants. The startup has more than 200 employees and claims to have over 10 million monthly active customers on its platform.
A large number of small and medium-sized businesses operate in India. Khatabook and other such firms can take advantage of these vast numbers and employ their services to provide a more efficient method to keep their finances in check. It is also planning to expand its services by adding a lending option. Naresh said that it will provide lending to merchants beginning from this year. Online lending has become a popular option in India in recent years. But only a few companies had added the option for lending to small and medium-sized businesses.
Arjun Sethi, co-founder, and partner at Tribe Capital stated that Khatabook has been successful in promoting digital transformation among MSME businesses in India. He added that his company is happy to be a part of the growth of Khatabook. The startup was also badly affected by the pandemic last year as lockdowns were enforced. But after that, the startup has been witnessing growth. Naresh stated that in the month of July, their business had reached an all-time high. He added that “MSMEs have come back very strongly and businesses were not as impacted by the second wave this year as they were by last year’s.”