The new generation Bengaluru-based FinTech startup OKCredit was launched in 2017. They drew the focus on the segment, which usually goes unnoticed. It was small businesses that did business on credit and had to maintain books of accounts manually.
The founders noticed the gap in the market and introduced an app that would record and keep all the transactions, thus keeping it transparent and hassle-free for both the business owners and end-users.
These modern days FinTechs offering Software as a Service (SaaS) have had tremendous growth in the past 5–6 years and are currently valued at $31 billion and have a projected growth of $84 billion by 2025.
In three years, OK Credit, which was launched in 2017, has over 10 million active users. Transactions worth $12 billion were recorded in this span till January 2021.
Though there were hiccups in the nascent stage of lunch as the small business owners found it difficult to trust an app that would replace their age-old practice of manual bookkeeping.
Gradually, they realized that with periodic reminders for payments, not only could they keep track of their credits well, but they also received their dues on time. It was much easier than the painstaking process of manual keeping, where there was a high margin of human error.
OKCredit Founder’s Journey
Harsh Pokharna is the CEO and co-founder of OKCredit. He launched OK Credit in April 2017 along with Aditya Prasad and Gaurav Kunwar, who are co-founders and CTO and CPO of OK Credit respectively.
In the pursuit to do things differently, the founders realized that they needed to explore and find out the needs that existed in the market. They actively started interviewing people within their known periphery. In the process, the experience they had gathered from the local grocery shop led to the idea of OK Credit.
They realized transparency was required in the transactions. Since these local small businesses are usually operating in credit has a stronghold in Tier II and Tier III cities and small towns with a flaky internet connection, it, therefore, became of utmost importance to develop an app that will be easy to download and easy to use.
Initially, making the merchants tech-savvy was an uphill task. Thus, the app created had to be unique to support weak internet connections, facilitate easy download, and be supported with voice assistance.
Harsh Pokharna, the CEO and co-founder, is a mechanical engineer from IIT Kanpur. After completing his graduation, he worked with prominent organizations like Flipkart, Intel Corporation, and Reliance Payment Solution Limited before beginning his startup journey. The first startup was ClanOut, a platform to discover friends and do social networking.
Aditya Prasad, the CTO, and co-founder has completed his degree from IIT Kanpur and worked with prominent companies like Hitachi National Informatics Centre, and Reliance Payment Solutions Limited before joining Harsh Pokharna with startup ideas.
Gaurav Kunwar, the CPO and co-founder, completed his degree from IIT Kanpur and joined the duo in their startup journey.
The trio started its startup journey as an online venture. It helped the users to get rid of the manual intervention of recording transactions on paper and settling it digitally. Though the initial clients of OK Credit took time to grasp the nitty-gritty of the app.
OkCredit received good reviews as the business relationships of the small business with their customers developed, making it trustworthy as they received alerts on time like banks, which enabled them to collect or pay their credits on due time.
Funding
OKCredit was the first digital accounting app to be launched in India. It raised capital worth $10 million from OkTechInc, its parent company based in California in the seed round.
In Series A funding, OKCredit raised $15.5 million in a round led by Tiger Global and Y Combinator. In Series B funding, OKCredit raised $67 million in a round led by Tiger Global and Lightspeed India Partners.
The startup has seen huge traction with the number of active users in the first few years of its launch in the pre-revenue stage.
Sustainability of OKCredit
OKCredit has also launched OKShop, its online store, enabling merchants to sell their products online directly through the app. As the startup is yet to generate revenue, it plans to focus on its core and discontinue the services of OKShop.
Though its revenue from operations has figured at 3.79 lakh in FY 21 and its income from other sources including income tax refund, net gain on foreign fluctuations, gain on sale of the mutual fund, interest income on fixed deposit, and other income accounted for 5.7 Cr, the Bengaluru based FinTech startup has posted a loss of 2,866X times of its operating revenue in FY21.
It is to be noted that the FinTech startup’s loss during the FY21 after tax is reported at 108.7Cr, which is less than the 156.5Cr of FY20 when it was in the pre-revenue stage with no revenue generated from operations.
Conclusion
The FinTech startup has off late lay of 35 employees in February 2022. The step was necessary at this juncture as they wanted to explore the FinTech segment and not restrict themselves to digital bookkeeping.
With deep market penetration of 40 million lifetime downloads, out of which 1.2 million come in the last three months, it wants to strengthen its growth channel along with digitalization and grow with the SMB ( Small Medium Business) Sector.
The Tiger Global backed startup while laying off its employees, the founders have spoken to each of them individually and looked into the clearance of their ESOP transfer, employees severance pay, extended medical insurance, and smooth transition to their new career as much as possible.
With the realignment of its workforce, OKCredit is looking forward to hiring the right skill set that is required. With a shift in its gear, OKCredit is focused on growth and generating revenue.
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