Just when the discussions on the Goods and Services Tax (GST) are heating up, Delhi-based startup LegalRaasta, which provides finance and taxation services to SMEs, has raised Rs 32 crore (approximately $5 million) in Series A funding from Impanix Capital.
LegalRaasta said in a press release that it will use these funds in building GST compliance software for SMEs, CAs, and enterprises. There will be a standalone GST software as well as an API interface to connect ERP (such as SAP, Oracle, and Tally) with GST systems. They intend to simplify GST filing through features such as reconciliation, excel upload, and app-based GST filing.
“Our aim is to invest this money in building our technology and operational team. We will scale up the team to 300 people over the next six months,” said Co-founder Pulkit Jain in the press statement.
A two-year journey
LegalRaasta was founded in 2015 by former McKinsey consultant Himanshu Jain and his brother Pulkit, who is a CA-CS. Aiming to help entrepreneurs and SMEs with business registrations and compliances, this online platform also assists its customers with filing tax returns, getting FSSAI and IEC licences, and drafting legal documents. The company claims to have served more than 80,000 SMEs till date.
As GST is expected to be implemented from July, LegalRaasta has started hiring a management team from top consulting firms and other large tech startups to build its GST offering. The startup has also brought RK Jain, a senior VAT official, on board as an advisor.
“GST is a big opportunity and many organised tax players will emerge. A five-10 percent market share translates into billion dollars in revenue. We liked the team at LegalRaasta, and believe that they will emerge as one of the top players,” said Archit Bhargava, Venture Partner at Impanix Capital.
LegalRaasta has already applied to the government to be a GST Suvidha Provider. They are targeting 80 lakh SMEs to be covered under the GST regime. The legal services market in India is estimated to be worth Rs 40,000 crore, growing at 25 percent annually. In fact, GST compliance is expected to be a Rs 17,000 crore market.