[The Turning Point] How KhataBook became the startup that popularised the ‘khata in your pocket’ idea
Digital ledger app KhataBook, with its apt tagline ‘Digital India ka Digital Khata’, took wings from an idea during a meeting at digital spend manager company Kyte.ai.
Back in 2016, Ravish Naresh, along with his team of college friends, started Kyte.ai, a digital spend manger app. They wanted to help their users understand their expense pattern using their SMS alerts. As digital transactions happen along with SMS alerts, they felt it was a good entry point to make sense of users’ financial state.
Kyte had initial good traction and user reviews, but the team realised that something was amiss. Their intelligent SMS inbox did not reach their expected growth scale. They figured that all their users were based out of metropolitan cities.
“The new market that is coming online, thanks to Jio, is completely outside of metro cities and deals in cash. So digital transaction or spend manager was not making a huge difference for them,” says Ravish.
Digging deeper, they found that the first-time online users did not deal in digital transactions. They were still relying on traditional khata, or ledger book. That is when the idea for KhataBook materialised for the Kyte team.
“It is important to build something that people want and then try to build a business around it,” says Ravish. And that is exactly what the team did.
In 2018, it started work on a simple cash management app and named it KhataBook to stress on the idea that traditional khata can be replaced by digital khata. It shifted their focus to small shopkeepers and decided to change their financial lifestyle by helping them manage their transactions and track repayments.
Once it decided on KhataBook, the team included its earlier idea of checking the SMS inbox in KhataBook. It ensured the app sends out free SMS updates to the user’s customers on every transaction and even sets payment reminders. This feature has ensured a 3X faster return on credits for their users. The app has recorded $5 billion+ cash transactions by November.
The 11-month-old startup raised a Series A funding of $25 million from GGV Capital, Partners of DST Global, Sequoia India, Tencent, and others. It has had a 10 million+ app downloads and is growing steady with good user reviews and traction.
While Kyte is an ongoing project, KhataBook has recorded 100X of Kyte’s users. Currently, the app has 5.5 million active users per month and the startup aims to reach 20 million active users by the end of 2020.
(Edited by Evelyn Ratnakumar)