This startup by former Freecharge exec is providing a faster payment gateway for B2B service providers
Ask any service provider, freelancer, or an independent employee from the gig economy, and they complain of one constant problem - getting payments on time. It is to solve this problem that Refrens was born.
Founded by ex-Freecharge and ZipDial product manager Naman Sarawagi and tech consultant to multiple startups Mohit Jain, the platform offers free invoicing software for business service providers, and helps collect payments faster from clients.
The Bengaluru-based startup focusses on B2B service providers such as individual freelancers to 50-people teams.
Founded in July this year, the team claims to already have 400 businesses using the platform, and is growing at 20 percent week-on-week.
A user, typically a freelancer or a small agency, can use the platform to make invoices and to collect online payments. After creating three to four invoices, the user will start seeing their network on the platform, and will have the ability to invite more businesses.
“Each member in the network offers a referral commission that other members can see and give leads for. The members in the network know about each other’s business because they are either a vendor or a customer of the other business, and hence the leads are well qualified and have higher chances of conversion to sales. Once a lead is converted, the business uses platform to pay out commissions,” says Naman.
Traditionally, invoicing platforms have been sold as a SaaS tool for subscription, but the duo believes there are a few B2B service providers who would want to pay a good subscription fee for such a tool.
“Instead, if we help them network around it, there is more value that can be extracted for a business. Getting initial users for a networking platform is always challenging, but once you have used Refrens for a few invoices, you will start seeing the value,” explains Naman.
How it started
Both Naman and Mohit got the idea to startup in the space from their personal experiences. Being freelance consultants themselves before starting up, and by virtue of their work, they came across a lot of business requirements that can be fulfilled by other service providers.
Citing an example, Naman says, an insurance company needed help with a contact centre setup, and a logistics app needed someone to manage digital marketing for them.
“We didn’t provide these services on our own, but the client would trust our recommendation. A good incentive would have encouraged us to channelise the lead flow. We were too shy to ask for any incentive from capable service providers, and hence did not take enough interest in the transaction. For the ones that materialised, we really thought we could have made a ‘sales incentive’,” explains Naman.
Prior to founding Refrens, the duo had worked together in another startup called FindYogi.
Market and business model
Currently bootstrapped, Refrens is targeting a chunk of the $7.1 billion cloud market. A Nasscom report suggests that the Indian SaaS market will touch $3 billion to $3.4 billion by 2022.
“There are freelance designers, coworking spaces, software services firms, and even an investment banker using our platform. We have a small revenue through the online payments system. If you collect online payments, we collect a fee of 0.1 percent,” says Naman.
Differentiator and future
At present, there are several startups working in the invoicing space in India. Unicorns and giants like Freshworks and Zoho aside, there are others like Anchor, Wave Invoice, and Hiveage to name a few.
However, according to Naman, comparing Refrens to SaaS products that provide invoicing would be wrong because their platform is for free.
“B2B networking happens mostly through offline events, which are small and clustered. We have a major advantage of being online here,” he says.
Based on the client-vendor relations captured on the platform, Refrens let the businesses network amongst themselves to pass on qualified business leads. Naman adds that these leads have a high value of an average of Rs 50,000.
Explaining the advantages, he says, without the networking platform, the businesses wouldn’t have enough data about their peers, and hence wouldn’t be able to generate qualified leads for them.
Speaking about their future, Naman says:
“We want to bring one million Indian businesses on the platform by the end of next year. We will then be exploring the market in the US, Europe, and South Asia.”
(Edited by Megha Reddy)