Tech-ifying kiranas: KhataBook is changing the way groceries work in India

Ask any kirana shop owner as to which part of his work troubles him the most and the answer you are most likely to get is retrieving money from customers who buy goods on credit. The issue is not just limited to kirana shop owners. Small businessmen across the country spend a lot of time and effort in recording transactions on physical books and pursuing defaulting customers.   

But technology is finally coming to their rescue. There are now several start-ups in India that are providing tech-based solutions to the centuries-old problem. One among them, KhataBook, has found a place in Sequoia Capital India's accelerator programme 'Surge'. As part of the programme, Sequoia will invest $1.5 million in the start-up.

KhataBook helps small shopkeepers and merchants to maintain a digital record of their transactions through a cash-management app. The key feature of the app is 'free SMS reminders' to people who owe money to the user. The multi-language mobile application also automatically generates reports on entered transactions, helping users to do away with manual calculations.

The app is free and co-founder Ravish Naresh says he intends to keep it free for now. Founded in August 2018 by Naresh, Jaideep Poonia, Dhanesh Kumar and Ashish Sonane, the platform has already clocked 1 million active users. The start-up has not spent any money on marketing and the CEO states that all the downloads have come through organic searches.

KhataBook has no revenue source at present. Naresh says their focus is now on developing the app to provide a complete financial solution to small businesses.

The start-up has plans to bring a host of new features on to the platform and the next in line is UPI payment. The CEO says he and other founders are bullish on this feature. "Shopkeepers made entries worth $1.6 billion in May on our app. Even if 10-20 per cent of these transactions starts happening online, we would see average transactions valuing around $200 million on our platform".

But the start-up is not planning to monetise even this feature. It has set its eye on financial services for returns. As per the plan, KhataBook will extend credit line and provide insurance services to its users in the future.

However, dealing with a price-sensitive and change-resistant user base won't be easy for the company. The biggest headache for the platform is to provide a slew of service without complicating the user interface. "Replicating offline experience on an app for first-time users is our primary challenge," says Naresh.