This IIT-B and Harvard alumna’s fintech startup is empowering India’s middle and low-income employees

Khushboo Maheshwari has always been inspired by former Pepsico CEO Indra Nooyi. She wanted to emulate her and rise to an important position in a large organisation. 

However, she had a change of heart and idea while she was doing her second year of her MBA course at Harvard Business School (HBS). She was opening up to the idea of building something from scratch, a startup that would positively impact people. 

After her graduation, the IIT-Bombay alumna worked in consulting for a year in the US before she returned to India in 2013 to later start Kaarva, a financial wellness platform that provides salaried people from the low-and middle-income segments with early access to a portion of their earned salaries for the month. 

The journey of starting up 

Back on home turf, Khushboo was inspired by InMobi- India first unicorn startup and wrote a cold email to founder Naveen Tewari, also an HBS alumni. 

She joined InMobi's CXO team and handled business growth and new project launches. In 2015, ready to venture on her own, she and a close friend started a fashion tech startup. 

The timing was wrong and it was too niche a business to take off during that time, and the duo had to shut stop. 

In 2016, she switched gears again and helped build N/Core, an incubator for not-for-profit startups.  

Working with N/Core, Khushboo learned first-hand how millions of Indians, despite working hard to earn a livelihood, were troubled by financial stress. She was stuck with the question - “How can we help increase financial health and help build resilience, to unlock people’s potential to do  more in life?” 

Supported by Co-founder Agam Goyal, her junior at IIT-B, the duo were driven to solve the financial problems of tech-savvy, low-and-middle income and employed people. Their collaboration led to Kaarva, an online lending platform that provides early and 24 X 7 access to earned income in addition to affordable loans and tools to save money. 

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Solving financial problems 

Bengaluru-based startup, Kaarva was a part of the Financial Inclusion Lab, an accelerator program at IIM-Ahmedabad’s startup incubator CIIE.CO’s Bharat Inclusion Initiative, and received Rs 20 lakh as a grant. 

It also raised its seed round funding in January 2019 from angel investors such as InMobi’s Naveen Tewari, Piyush Gupta, Yulu’s Amit Gupta, Vokal founders Aprameya Ramakrishnan and Mayank Bidawatka, Venk Krishnan, Melissa Frankman of Emphasis Ventures (EMVC), Better Capital, Cube’s Satyen, Bhagchandka Family Office Fund, Gemba Capital, among others. 

Being raised in atleast 10 Tier II and Tier III cities, Khushboo saw many people struggle with their finances and often needed advances from their salaries, which would take days to arrive in their bank accounts. She recalls being in queue at a hospital behind a family of four. She could sense that the family was struggling with money. Their bill came up to Rs 3,200. The man called up the doctor and asked, “Sir, hum yeh 4–5 din ke baad karva sakte hain kya?” (Sir, can we pay the money after 4-5 days). It was the 26th of the month.

“We cannot have people’s lives held hostage by the unavailability of a few thousand rupees because they cannot access their own earned, unpaid salary,” she says. 

She adds that every year more than Rs 6 lakh crores of the money we earn are held up in the monthly salary-cycles. Furthermore, 57 percent of working Indians, living from salary to salary, are being hit with minimum balance penalties, late fees, and high-interest informal borrowing to bridge the gap, while they wait. 

To help people access their salaries early, Kaarva partners with employers to provide their employees with a financial benefits platform that includes products such as Cashout which provides real-time salary access, affordable advances, and tools to build savings. The startup also offers salaried employees a credit limit of 30 percent of their salary with a maximum limit of up to Rs 10,000. 

While the platform comes free to employers, it has a ‘pay what you like model’ for the services they offer to employees. For access to real-time income service, they do not levy any charges but advances from the salary are available at a low interest rate per month. 

“By helping employees manage credit, build a savings habit and access earned pay, we are creating a more accessible and much cheaper alternative to traditional financial options,” says Khushboo. 

Kaarva processes more than 30,000 cashouts a month and is available to 30,000 employees through 25 employer partners including Quess, Cloudnine, Silvercrest, and more. 

Helping people in the time of Covid-19

Understanding the financial stress caused by the coronavirus pandemic, Kaarva has launched the Covid-19 Sure product, where employers can help reduce uncertainty for their employees by providing quicker access to their own salary and provide options for affordable advances in any financial stress.

“No one would have planned for a black swan event like this. We would like more employers to offer our Covid product to their employees and reduce the uncertainties they are going through,” she adds. 

The lockdown has also affected the startup. Both the founders have had to take a 100 percent pay cut and Khushboo believes that if the uncertainty continues, they may have to take tough calls to increase their runway with the team.

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Challenges and future plans

Khushboo says that challenges of being an entrepreneur across industries is similar to the challenges of being a woman. She remembers fearing that her pregnancy may jeopardise her startup’s future. While raising a seed round funding, she was pregnant with her son and had to also look after her four-year-old daughter. In her initial conversations, she was often asked, “So, how do you manage your daughter with your startup?”

She wondered if her male counterparts were ever asked this question. With this question as a precursor, she wondered if she should mention that she was expecting another baby. 

“There are many stories of woman entrepreneurs - a testament that one can successfully make it work for their startups/careers despite their personal responsibilities. They have the power to create the ecosystem that can positively support them both ways, but we still fear - why?” she questions. 

With her supportive team of six members, Khushboo plans to scale Kaarva to greater heights. It envisions to become the country’s number one holistic financial well-being platform and onboard the 100 biggest employers in India, while building financial products, which are sustainable and risk-free. It is also experimenting with specific products during this COVID-19 lockdown. 

Khushboo aims to work with government agencies and other stakeholders to establish the concept of employee financial security and wellbeing, inclusion of earned income access at a policy level and help build an ecosystem around it.

(Edited by Rekha Balakrishnan)