[Funding alert] SaaS startup for SMEs, TranZact raises $7M in Series A round
The SME tech startup, offering a SaaS-based digital transformation tool for SMEs, has raised $7 million in Series A round. The funding was led by San Francisco-based Tribe Capital with participation from Prime Venture Partners, Gemba Capital and existing investor Kae Capital.
Several noted angel investors also participated in TranZact include BharatPe's Suhail Sameer, ex Spotify/Tinder executive Sriram Krishnan, Zetwerk co-founders, OfBusiness co-founders, Paytm's Devendra Rane, Climber Capital's Giridhar Malpani, and Locus.sh's Krishna Khandelwal.
The investments will help accelerate TranZact’s product-led growth vision of onboarding over one million SMEs in the next 12 months. The startup will use the fresh capital for product innovations that bring simplicity, leverage evolving technology, and harness the power of data to help SMEs grow better. TranZact also plans to invest in new talent and expand its team across all functions.
Shripati Acharya, Managing Partner, Prime Venture Partners said in a conversation with YourStory, "We believe Indian SMEs will rapidly adopt technology in order to drive cost savings and efficiencies. This is a massive opportunity as 14 million manufacturing SMEs digitise their operations."
Founded by Ritesh Kumar, Sharad Sen Sharma, and Rohan Sen Sharma, TranZact helps Indian SMEs automate and digitise their operations. It also helps SMEs make data-driven decisions for operations by streamlining purchase, inventory, sales, and quotation management.
Shripati added, "We rarely come across an opportunity with such rapid growth along with deep engagement and customer love. TranZact aims to onboard a million SMEs in 2022, driven by their torrid product-driven acquisition engine along with high retention. The team bring both strong tech DNA and a deep understanding of the market. With a strong team, deep market and market-leading product, it was an easy decision for us to invest in TranZact along with Tribe capital."
Speaking of their early days, Ritesh told YourStory, "In early 2016, we were working on a different idea in the fitness space where we worked closely with a person who ran a gym in addition to a fitness equipment manufacturing unit. While the fitness idea did not work out, we used to spend a considerable amount of time in the gentleman’s office/factory for six months."
He adds they saw first-hand the problems these organisations face in terms of tech, and tools that can help manage workflows and sourcing. Most SME manufacturers have Tally, but that is used for accounting and the rest of the business is run on excel sheets.
"This was a very interesting finding and we further decided to work on this idea which then became TranZact," added Ritesh.
The software is free to signup and gets implemented within five working days with a 24x7 customer support team to handle any issues. Since its inception in 2017, TranZact has onboarded more than 20,000 SMEs across industrial, electrical, and electronics, chemical, and packaging sectors.
Arjun Sethi, Co-founder and Partner, Tribe Capital said, “In India, SMEs have historically struggled to pursue more than one growth path at the same time due to a lack of cost-efficient and easy to implement digital transformation solutions. TranZact solves this core need by efficiently leveraging their ‘freemium' plan and simplified onboarding process to onboard new customers.
He added, "We see great potential in TranZact and its solutions portfolio in providing SMEs with the necessary digital edge to successfully grow their businesses. Tribe is also excited about supporting businesses which are building for India and present a massive opportunity to transform various sectors through technology.”
"During COVID-19, TranZact helped a lot of companies to take their first steps towards digitisation without interrupting their accounts as TranZact has a very robust integration with Tally. Furthermore, the freemium pricing plan and a faster onboarding period of five days helped many SME owners to make the decision much faster," added Ritesh.
He said initially, the team used to get a lot of feature requests from their customers. But they realised that while they strongly showed the need, there was hardly any use of the features.
"Therefore, we decided to build products that focus more on output-driven features that building business intelligence, robust notification systems etc. This helped us a lot in terms of bringing the focus of product development to those things which are more critical," said Ritesh.
Luke Erickson, Partner, Tribe Capital “Currently, there aren't great ways to identify, invoice or manage complex supply chains in India. TranZact is breaking a pattern of more archaic systems by providing the most complex supply chains in India with a better way to interface with each other. We've been incredibly impressed by the Tranzact team and their ability to design a viral adoption loop that sustains by shifting the existing manual workflows to automated and scalable digital ones.”
Edited by Kanishk Singh