Khatabook pivots to new monetization model with digital lending offerings

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Khatabook, a fintech software-as-a-service (SaaS) startup, plans to scale its financial services offerings, which will be its first strategic monetization model, and expects to reach profitability in the next 18-20 months.

“Khatabook's new monetization model is focussed on scaling its financial service which includes digital lending offerings along with increasing the subscriber base for its paid SaaS service offerings,” said Ravish Naresh, CEO, and co-founder of Khatabook.

Khatabook has completed a successful digital lending pilot, and it is now available in all major metros and tier-1 cities in India.

The startup expects to clock a loan book size of Rs 1,000 crore in the next 12 months with the new offering, the company said in a prepared statement on Tuesday.

“We intend to gradually scale up digital lending with a plan to touch an AUM of 1,000 cr in the next 12 months…We stand at 10 million monthly active users spread across almost every district in India, and our platform records more than $32 billion in monthly transactions (in value) by our MSME users,” Naresh added.

Khatabook has launched various apps, the majority of which are free. Khatabook and 'Tally on Mobile' which is Biz Analyst are both SaaS app, where Biz A is completely paid and Khatabook is free. Now, On top of their SaaS offerings, they are building Finserv / Digital Lending.

On the paid SaaS services, Biz Analyst by Khatabook has 150,000 paid users and will launch a paid desktop version of Khatabook in November, according to the company.

Khatabook, founded in January 2019 by Naresh and Dhanesh Kumar, enables micro, small, and medium-sized businesses increase efficiency and profitability through safe and secure digital solutions.

In August 2021, Khatabook closed a $100 million Series C funding round with a valuation close to $600 million.

“We have most of the money we raised in our pockets and the focus will now be improving the finances and generating profits in the next couple of months,” Naresh said.

"We are an experiment-driven start-up. We have developed a strong understanding of MSME business and finance behavior with our scale of offerings, and now we are well positioned to enable financial service offerings suitable for the segment. We are consolidating all our SaaS offerings under Khatabook and Biz Analyst platforms and building Finserv / Digital Lending on top of SaaS," Naresh added.