Digital ledger or khata app OKCredit added nearly 7 million new merchants to their network over the past year as companies like Kirana stores and small merchants use digital solutions for their day-to-day operations. “Our merchants gained over 70 million new customers in 2020 and their acceptance of digital payments increased by 250%,” said Harsh Pokharna, co-founder and CEO of OKCredit, told MediaNama.

OKCredit was founded in 2017 by Pokharna. Gaurav Kumar and Aditya Prasad, three graduates from IIT Kanpur. The flagship accounting app, OKCredit, is one of many enterprise software services the company has developed to formalize small and medium-sized enterprises (SMBs) across the country. Merchants can keep a digital ledger of all their sales and accounts, accept digital payments, and also send payment reminders to customers. Soon, the company’s merchants will be able to set up an online store and manage their employee payments as the company launches new industries in the coming months.

“Like any other business, the digital accounting segment had to go through ups and downs in the middle of the Covid pandemic. As of March 2020, our user base has grown 34% to 27 million registered merchants from different parts of India, many of whom are from Tier 2 and Tier 3 locations, ”Pokharna said. He added that thanks to its availability in 9 regional languages, the app can touch 95% of the country’s PIN codes. The Bengaluru-based company has raised $ 84.2 million, according to major investors such as Y-Combinator, Tiger Global and Lightspeed India Crunchbase.

MediaNamas interview with Harsh Pokharna, Co-Founder and CEO of OKCredit.

MediaNama: How has the platform developed over the last year?

Pokharna: Our business declined 26%, 31% and 38% respectively in Tier 3, Tier 2 and Tier 1 cities in April last year. However, things changed with the increased activity in the micro, small and medium-sized enterprises and the rapid adoption of digital business tools to increase efficiency and growth.

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Our growth in the unlock phase of the COVID-19 pandemic was particularly strong in small towns and the hinterland, and we saw a strong recovery in demand from Tier 3 cities, followed by Tier 2 and Tier 1 cities. At company category level, different degrees and speeds of recovery have been observed since February 2020. We saw double-digit growth in medical and kirana businesses of 21% and 15%, respectively, in September 2020. That was after a 12% decrease in medical supply stores and 22% in kirana stores in April last year.

In terms of the total value of transactions on the platform, OkCredit achieved 0.5% of total Indian GDP of $ 2.6 trillion in 2020. This was made possible by over 800 million transactions on the platform in 2020, valued at $ 40 billion in transactions. Before the second wave, we saw an increase in both the number of transactions and the transactions made by traders. Compared to February 2020, our transactions in February 2021 were 15% higher.

MediaNama: If we look at the digital payments ecosystem, most fintech players have burned money on marketing and advertising expenses. What is the primary cost center for OKCredit?

Pokharna: Technology awareness in the small and medium-sized enterprise (SME) ecosystem was very low. Despite being a large market, small retailers are unwilling to adopt technology tools. There is sluggishness, a lack of trust, and a lack of understanding of how to use apps that can improve their business. Much of our resources went into building this awareness from the ground up as we were among the first to enter the SMB space. Since we scaled quickly, we also invested in strengthening our team.

MediaNama: When the leading fintech payment providers launch their own khata Function, does this affect your moat?

Pokharna: India’s small and medium business space has 60-70 million dealers, which is large enough for businesses to compete. In our experience, the SME sector needs a specialized focus of companies building for a particular population group rather than a diversified approach. Our priority is to build a sustainable and scalable business for long term growth along with customer loyalty. Our core competency lies in understanding the needs of SMEs and building for them. What sets us apart from others is the simplicity we offer users such as the ability to add transactions by voice, the ability to use the application in more than 9 different languages, the ability to access their records offline and other features .

MediaNama: What is your strategy in view of the upcoming lockdown of several states?

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Pokharna: We have evolved from a single product company to a multi-product company solving problems for different segments of the diverse SME base. We recognize the unique value of network effects in this and have begun to pursue this in order to offer them more value. We intend to create an ecosystem of digital solutions for small businesses to help them cope with their business tasks such as digital accounting and human resource management, as well as creating an online presence to compete with more organized actors. Our digital accounting application has already become an integral part of the small merchant business due to its great user experience.

Last year we launched our innovative new solution called OkShop, which enables small retailers to set up their online presence. This year we intend to continue with the full rollout of OkStaff, a free human resource management app that allows SMBs to manage their employees’ payments, attendance and more. Our first priority is to scale and stabilize two of our new launches.

We listen to our customers all the time. We assess the gaps in demand in the SME sector and, based on the feedback from our dealers, will only bring products onto the market that are relevant to the segment. We continue to focus on growing organically and investing flexibly to attract new users.

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