Ali Hasan
Secure all your Financial Transactions with OkCredit
Introduction – OKCredit simplifies credit account management for shop owners and their customers. It is a mobile based solution that enables recording of credit/payment transactions digitally all across the country.
Gaurav Kumar, Harsh Pokharna and Aditya Prasad founded it in April 2017, with its headquarters in Bangalore in India.
Early Days – After graduating from IIT Kanpur in 2014, co-founders Harsh and Gaurav took up a job at Flipkart. Their friend and batch mate Aditya Prasad who is also the co-founder and CTO of OkCredit went on to work with a data company called Fuzzy Logix.
The start-up ecosystem was just getting established in India and the three of them wanted to do something of our own. They built a few apps which did not work and even tried their hand at blockchain. In 2017, out of their personal experience, they started OkCredit.
They had a first-hand feel of the problem and that immensely helped them to build a product that would solve problems not just for the SMBs but also their customers. While living in Bengaluru, they used to buy from a grocery store opposite their apartment.
Once they went to the store to settle their month-end credit balance and they were astounded by the shopkeeper’s painful process of taking out each bill and calculating it up. The process was fraught with error and manipulation and wasted a lot of time, both for the customers as well as for these shop owners.
That’s when they decided that there was a need to make this transaction simple and smooth, giving birth to the idea of OkCredit. They initially started off working solely with grocery stores, which we got through referrals. We wanted to expand our market reach and explore other segments.
For that to happen, they started talking to people in the industry and upon that they realized that the same problem existed throughout all categories and supply chains. There was a dire need in the market for making account management simple and that the sector was marginally neglected.
After that, they slowly started establishing themselves and there was a spurt in demand for their products across all market segments and geographical regions. That’s how OkCredit was actually started. OkCredit has also launched OkShop, a new app that allows small shop owners to set up online stores, create product catalogues and let them share inventories and offerings on WhatsApp.
The company launched the app on August 24 2020 and so far it has garnered over 10K downloads on the Play Store. The company has built and introduced OkShop within a month of its rival Khatabook launching a similar app called “Dukaan by Khatabook.”
This positions the two arch-rivals head-on in a new segment apart from their core offering of bookkeeping. Both OkCredit and Khatabook have raised over $80 million each from marquee investors including B Capital. Since euphoria around bookkeeping has been subsiding, it seems like a good time for companies like Khatabook and OkCredit to diversify.
Marketing Strategy – They used a marketing campaign where they encouraged small business owners to use OkCredit mobile app instead of using the traditional pen and paper as there are numerous benefits of doing so. They used a tagline “Ab hoga hisaab, bina kisi kitaab”.
The company encouraged that if you’re a small business owner, then it’s quite risky to use pen and paper to record your daily financial transactions as paper could get wet, burned, stolen or simply eaten by mice.
Hence, it’s way better to use a mobile app where your data is safe and secure from anything and anyone. They also promoted that their app has the functionality of sending notifications and payment alerts of the amount that has to be collected by you.
User Base – OkCredit enjoys over 5.5 million active users with around $7.5 billion (roughly Rs. 54,739 crores) worth of transactions recorded in the month of October. In this space, OKCredit has stiff competition from Khatabook, which achieved 10 million downloads through word of mouth within merchant networks within a year of its launch.
Funding – OkCredit has raised a total of $84.2 million in funding over 3 rounds. Their latest funding was raised on Sep 13, 2019 from a Series B round. OkCredit is funded by a total of 6 investors. Lightspeed India Partners and Tiger Global Management are the most recent investors. Their other investors are as follows:-
- Y Combinator
- Venture Highway
- 5Y Capital
- Sinai Ventures
Revenues & Losses – OkCredit saw its total expenditure shoot up 86 times to a little over Rs 157.5 crore in FY20 from annual expenses of around Rs 1.83 crore FY19. Most of these costs were spent on customer acquisition.
Incessant cash burn to achieve scale has been the theme for a number of early-stage startups in the Indian ecosystem and OkCredit is not different. Overall, OkCredit widened losses to Rs 156.58 crore from Rs 1.77 crore the previous year, while total revenues grew to Rs 91.18 lakh from Rs 5.44 lakh.
Acquisition – So far OkCredit hasn’t acquired any startup.
Controversy – So far OkCredit hasn’t been involved in any controversy as of now.
Present Time & Future Goals – In the second wave of the raging COVID-19, OkCredit launched a Co-aid.in website to help suffering people discover verified leads for important COVID-19 medicines and devices. The portal provides real-time information on drug availability across India, as well as store contact numbers for making inquiries.
Users can search for availability by entering the location name or PIN code in the portal. This initiative aims to make such drugs easily accessible by knowing where they are available. The company opened source data from two or more easy pharmacies and businesses on the platform.
These stores and companies sell medical products and services such as Fabiflu tablets, oximeters, O2 beds, regular beds, steamships, antibiotics, zinc / vitamins and oxygen used to treat COVID-19 patients. Data on oxygen and beds are crowd sourced, while data on medicines are from pharmacies on OkCredit’s platform.
Co-aid.in also allowed pharmacies and businesses that do not use the OkCredit platform to register on their website. Within 12 days of its launch, the website saw inquiries from 342 towns and cities inside and outside India, including New York, Singapore, Seattle and Los Angeles.
In India, Bangalore, Delhi and Kolkata are the most searched, but even smaller locations such as Panipat, Muzaffarpur and Lunch are using this tool to search for nearby pharmacies.
With a suite of simple, mobile-first products, they are solving some serious problems for different segments of Small and Medium Businesses, giving them multiple entry points to kick start their business digitization journey.
A strong network effect will be key to digitizing the 50 million Small and Medium Businesses over the next decade. They intend to facilitate these small businesses to become at par with large e-commerce players in leveraging technology to service their customers as well as simplify procurement, and integrate them with the formal economy and digital ecosystem.
In the future, they face a stiff competition with their fierce rival Khatabook. If OkCredit survives in the long run, either they’ll be acquired by a large company or they’ll acquire someone. Although it can also happen that it neither gets acquired nor it acquires someone.
The startup can survive for as long as possible if they receive regular funding from investors and they keep adding small and medium businesses to their portfolio. If they prevail in the long run, they could also file for an IPO in India.
Here’s an interesting quote from Harsh Pokharna, the Co-Founder & CEO of OkCredit.
“Small Businesses have 30% contribution to the GDP of India and they form the backbone of the Indian economy. We aim to digitize and automate all the flows happening in their shops with software. Our vision is to create a singular dashboard where small and medium enterprises can see their entire business picture.”
He also added “Moving forward, we plan to augment our service portfolio and drive two- to three-fold growth in business by providing more relevant solutions and value to our users. Remaining committed to India’s MSME segment, we will be adding services to streamline and simplify business processes for the merchants”.
Conclusion – To sum it up, OkCredit has gone a long way from its start and the startup looks quite promising in the future as well.
As of now, no one can say that which startup will emerge victorious in the long run but OkCredit certainly packs the punch to give anyone in their industry to give them a run for their money.
All of us would have to wait for the war to end to know the clear winner. Until then stay tuned to StartupTrak for more updates on various startups.
