There are various reasons startups get funding. A unique business model, a large market, the team, the founders, their background—all of this counts. But often, it begins with the idea.

Bookkeeping app Khatabook was handed its idea on a platter. 

Khatabook’s premise was simple. It allows merchants to record their credit dues and then issue payment reminders to debtors whose payments are due. The app wanted to replace the humble notebook, where such dues were traditionally recorded. 

It’s this simplicity that led Khatabook to some impressive numbers. It saw over 10 million app installations to date and claims to have over six million transacting merchants, according to the company’s January pitch deck, which was seen by The Ken. As for vanity metrics, Khatabook claims transactions worth $7.7 billion entered in the app in January 2020 alone. In comparison, its 2.5-year-old competitor OkCredit has around four million installs, according to app analytics firm App Annie.

Unlike other startups, though, this is chapter two of Khatabook’s journey. 

Chapter one unfolded in Nanded, in the state of Maharashtra, where engineering graduate Vaibhav Kalpe came up with the idea after seeing his father grapple with bookkeeping problems. When it launched in 2016, he didn’t anticipate that Khatabook would grow this big. “I did not have ambitions of building a business out of it,” he told The Ken. But the one-man app steadily grew, and by 2018, it had nearly 60,000 users. 

It was then that Ravish Naresh, the current co-founder and CEO, reached out to Kalpe over email. He bought Khatabook in an all-stock deal in just a week, according to Kalpe. 

Naresh’s belief in Khatabook wasn’t an accident. He knew full well the potential of a digital bookkeeping business courtesy OkCredit, a Lightspeed Ventures-backed bookkeeping app. OkCredit and Naresh’s previous startup, Kyte.Ai Kyte.Ai Kyte.Ai Kyte is an AI-powered SMS Inbox app that blocks spam and automatically organises a user's SMSes. Its other co-founders Jaideep Poonia, Dhanesh Kumar, and Ashish Sonone would go on to become Khatabook’s co-founders too. Poonia and Naresh were also part of the leadership at Softbank-funded , were part of the same batch of companies under a 2018 YCombinator YCombinator YCombinator YCombinator is a startup accelerator programme that provides seed funding for early-stage startups.  programme. 

These unusual origins set Khatabook up for the kind of growth story it is now riding. This growth, though, was sustained by its decision to not charge for its product—which means the company makes nothing in revenue. 


Arundhati Ramanathan

Arundhati is Bengaluru-based. She is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She has spent over 10 years reporting and writing on various subjects. Previous stints were at Mint, Outlook Business and Reuters.

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