India turns the business software industry on its heels with TrueCFO


In this series, Sramana Mitra shares chapters from her book Vision India 2020, that outlines 45 interesting ideas for start-up companies with the potential to become billion-dollar enterprises. These articles are written as business fiction, as if we’re in 2020, reflecting back on building these businesses over the previous decade. We hope to spark ideas for building successful start-ups of your own. 

In 2008, I started tracking several important trends. Among them was the software-as-a-service trend, which carried tremendous momentum. At the same time, I started hearing certain rumblings – “SaaS is dead,” they said. “It’s time for SES.”

Inch by inch, certain parts of the market were moving away from software-as-a-service, towards software-enabled service. Rather than just the development, management, and hosting of a specific software application, the end value proposition was the complete outsourcing of a business process. In other words, SES could also be framed as SaaS-enabled BPO. Here I spotted India’s opportunity to turn the business software industry on its heels.

For my Entrepreneur Journeys series, I had interviewed numerous SaaS CEOs, as well as a few whom I had a chance to brainstorm with about the SES trend. Jonathan Bush, CEO of AthenaHealth, was one of the strongest proponents of SES. Sabrix’s CEO Steve Adams, in his quiet, thoughtful way, also pointed out that his customers were asking for BPO, not SaaS. These two interviews had resonated with me and confirmed my own instinct that something in the software market had begun to change.

In addition, I did several in-depth interviews with Jim Heeger (CEO of PayCycle), Rene Lacerte (founder of PayCycle; CEO of, and wrote blog pieces on Everest, Intaact, and other financially oriented SaaS companies. Based on what I learnt from these discussions, and further research on the category, I decided to zero in on the CFO’s office, as well as the finance, accounting, tax, payroll, and regulatory filing functions within it, as our core emphasis in building an SES business.

Soon after, PayCycle was acquired by Intuit for $170 million, freeing Jim Heeger from his executive duties. I invited him to be an advisor to the company, and under Jim’s guidance we identified the 25 million small businesses in the US as our target market. This included the 20 million mom-and-pops, as well as the five million businesses with less than 20 employees. Jim and Rene had narrowed PayCycle into this segment, and they knew its behavior intimately.

At an idealistic level, I also felt that with the US economy shedding jobs by the thousands every day, a large number of people would be forced into entrepreneurship. As a lifelong believer in small business and entrepreneurship, I was writing column after column to promote entrepreneurship as a weapon of mass reconstruction. Across radio, television, and podcasts, I kept reinforcing the same message over and over again: Create your own job. Take control of your destiny.

We began by studying the existing software landscape. Intuit dominated the small business accounting software space with QuickBooks. Then there were players like NetSuite, Intaact, and Everest in SaaS for accounting. There were ADP, Paychex, and PayCycle in Payroll. In taxes, the most compelling player was Sabrix, although it had a largely enterprise-oriented offering. was building a solution for accounts payable and receivable. For each of their products we did an intense competitive analysis and outlined an integrated suite of on-demand software, poaching the best of each genre. Our goal was to re-create the entire suite of software that a CFO’s office would need to run their business, including pieces typically outsourced to consultants. Then deliver it all in one.

For seed funding, I went to a dozen SaaS CEOs I knew well. They all saw the opportunity and came through with $50,000 each. And for the first round of venture funding, I sat down with Ashish Gupta of Helion Capital. Ashish was one of the few VCs operating in India with a true product background. We had interacted many times over the years on the bottlenecks of the Indian entrepreneurship ecosystem, but TrueCFO was our first deal together. The fact that at the heart of this SES venture was a software product was not lost on either of us.

For Series B, we decided to bring in a service-oriented VC. By then, the product was getting ready to be rolled out, and the BPO delivery portion was the key challenge. Subrata Mitra, one of the cofounders of Erasmic Fund, which morphed into Accel India later, was also someone I had interacted with for a few years. TrueCFO was our first opportunity to join hands on a deal.

Not unlike CRM, the finance and ERP function had also seen a serious amount of software development by 2009. From Oracle Financial to Quicken, both Silicon Valley and Bangalore were full of developers with relevant domain expertise. We built a small, 50-person engineering and product marketing operation in Bangalore, even though I had sworn never to locate a company in that city due to its horrendous attrition culture. But the caliber of people we were able to attract was truly outstanding. I had announced on my blog the conception of this company, and resumes simply started flowing in. Good resumes. Great resumes. And from that pool, we handcrafted a high-end team determined to become more than what Purnendu Chatterji had once called techno-coolies!

With the first version of the TrueCFO product suite ready in roughly 18 months, we initially built a BPO operation with a 150-person team in Kolkata, where salaries were still reasonable. This team was trained to utilize the software, delivering all the related services to our end customers.

In the US, we partnered with the American Institute of CPA (AICPA), America’s oldest and largest trade association with 350,000 members. There, we identified a set of accountants with their own small accounting firms, working primarily with small businesses. To these small accounting firms, our value proposition was that by using us as their back ends, they could profitably service a much larger number of clients than they were otherwise able to. We further differentiated our product on the basis of pricing – taking advantage of the compelling cost structure of an India-based staff. And for their investment, we not only provided each accounting firm with services, but we also became a source of leads in their particular geography. In other words, our online marketing efforts, through search engines and social media, generated leads from end-user clients, which we passed on to our accounting firm clients to service.

By 2012, the model was working. Across 50 US cities, we had an average of 10 accounting firms, each supporting their clients entirely on our software, using our service personnel. We were handling all financial accounting functions, including payables and receivables, taxes, payroll, and all regulatory filings. We had a total of 500 accounting firm partners, supporting an average of 50-250 clients each. In many cases, these were solo CPAs, or two to five CPA firms. Working with us enabled them to become significantly larger businesses than they ever would have been on their own.

Each accounting firm used one of our back-office reps to support 10 clients on an ongoing basis. The cost structure was such that the end clients were charged an average of $1,000 a year for our outsourced CFO’s offerings. We shared the $1,000 65:35 with our accounting firms, taking 65% of the proceeds while offering them 35% as well as extensive lead generation through paid and organic search marketing efforts.

In 2013, we started implementing an additional component of our vision. We created a rural micro-franchise to support the back-end service operation. Our intent was to get entrepreneurs to infiltrate the Indian heartland, play leadership roles, and learn to run businesses, all while operating within a well-understood framework, free of wild experimentation. To this end, we partnered with SKS Microfinance to create $25,000 loans for entrepreneurs determined to set up their own operation in a village or small town. This money facilitated the initial 10-person operation, which was given a seed client – an accounting firm with at least 50 clients – to get started.

These operations, over a three-year period, grew to 100-person operations. Some, over a five-year period, scaled to 250, and a few climbed upwards of 500 people or more.

Of course, recruiting thousands of entrepreneurs who would become conscientious, and at the same time competent, franchisees was a significant challenge. It was not easy to tell just by interviewing whether franchisees would be able to execute, and we ran the risk of client wrath if they didn’t. We developed a recruitment campaign in partnership with NIIT, where their small-town teachers would nominate a franchisee plus 10 employees from among their students. Beyond this, they also helped us scale the operations, in the process placing further students with the local TrueCFO franchise. For these hundreds of students, finding employment within five miles of their remote homes had not previously been part of even their wildest dreams. But now our dreams, as well as theirs, spread throughout India like wildfire.

By 2020, we have established 5,000 such operations, employing over 250,000 people. We work with over 50,000 accounting practices in the US, and we service over 2.5 million small American businesses. Our revenue just crossed a billion, and we’re one of the biggest brands in accounting services in the United States. But, really, we’re an Indian company. Spread well into the depths of India, you will find TrueCFOs working in the towns and villages of Sikkim, Nagaland, Manipur, Bihar, Orissa, Uttaranchal, and Meghalaya. NIIT, once upon a time, created an educational franchise that trained people for computer-based jobs; TrueCFO, many years later, has created the actual jobs.

NIIT, once upon a time, created an educational franchise that trained people for computer-based jobs; TrueCFO, many years later, has created the actual jobs.


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