KhataBook, Bengaluru-based fintech startup has raised $100 million in Series C funding, at a valuation of $600 million, led by Tribe Capital and Moore Strategic Ventures (MSV).
Other investors in this oversubscribed series C round were Alkeon Capital, with continued investment participation from internal investors B Capital Group, Better Capital, Tencent, Unilever Ventures, RTP Ventures, and Sequoia Capital. In addition, Sriram Krishnan and Balaji Srinivasan participated as independent investors, among others.
The startup has also announced that it has now expanded its ESOP pool to $50 million. It added it is also buying back $10 million worth ESOPs to acknowledge and reward their employees, ex-employees and early investors. Eligible employees will be able to sell as much as 30 percent of their vested options.
Khatabook will focus on financial services disbursement through its software ecosystem catering to 10 million monthly active MSMEs with this fresh round of funds. The startup plans to accelerate hiring to strengthen its design, product, engineering, data science and analytics capabilities.
Ravish Naresh, Co-founder & CEO, Khatabook, said, “The first phase of our journey was enabling digital transformation by building a tech ecosystem for Indian MSMEs. Now that we have created a widely accepted digital platform, the next step will be digitally-enabled financial services for small businesses. We are humbled by our investors’ confidence in our mission to help local businesses succeed by providing them with the right digital empowerment. On this milestone for the company, we would like to acknowledge the contribution of employees and early investors through the ESOP buyback plan.”
Besides its flagship ledger application, Khatabook, the company is also focused on the growth of its software ecosystem for MSMEs through its other apps — Cashbook for expense management, Pagarkhata for staff management, and recently acquired Biz Analyst for insight-driven decision making and business management for Tally ERP9 user base.
Arjun Sethi, Co-founder and Partner at Tribe Capital, said: “At Tribe, we believe strongly in the power of the network effect and how it can create moats for businesses. Khatabook has successfully built such a network by empowering this seismic shift among MSME businesses to move from paper to digital, literally. Despite its large early success and fast adoption to date, the company is early in its path to power the segment. We’re thrilled to be a part of its growth as it leverages its network to build additional scale.”
The company stated it has a user base in almost every district in the country and it has seen a 150 percent Year-On-Year (YOY) growth in FY 20-21. Khatabook, currently with a headcount of 200+ employees, will accelerate hiring, especially in design, product, engineering, analytics, and data science functions.
James McIntyre, Senior Managing Director & COO of MSV, said: “We are excited to partner with Khatabook as they continue to provide millions of small & medium sized retailers in India with outstanding software products. This round will accelerate the growth of technology products with which Khatabook’s customers can better serve Indian consumers. Additionally, this round enables the launch of a next-generation financial services platform to escalate the growth of those same customers.”