Instamojo: Helping small businesses and micro entrepreneurs go digital

The platform helps businesses create an online store, accept payments and deliver products from one destination

In the era of digital, the Internet is the new marketplace. 

More businesses are preferring online to offline than ever before. Digital is also a key focus of the government through its schemes, Digital India and Skill India, which squarely focus on bringing consumers and businesses to this realm.

Instamojo, a seven-year old payments start-up, is at the cross-section of this opportunity. Its goal- support businesses move online. 

Instamojo does this by helping companies lay the foundation blocks for digital - payment accounts, online store-fronts, and logistics support - which serve as the pillars for any online commerce business. The Bengaluru-based start-up today supports over 700,000 merchants on its platform, which has expanded to a full-stack online commerce solution for customers.

“We started with payments gateway for MSMEs, but in the course of our journey realised that our customers - small businesses, micro-entrepreneurs and new-age gig economy workers — need so much more,” says Sampad Swain, founder and chief executive officer at Instamojo. 

“So we expanded to other services like logistics, credit and marketing as we evolved Instamojo from a payments gateway to a growth gateway.”

Swain is a serial entrepreneur who founded Instamojo, his third venture, in 2012. At the time, payment gateways — platforms that integrate with web sites and apps to accept payments — had found an initial foothold in India, while consumer digital payments were all non-existent. Instead of going for large merchants, Swain saw an opportunity in MSMEs, an underserved segment that offered a substantially larger customer pool.

“To create a payments business that is sustainable over a long term, we went after a new kind of customer, the MSME. So it had to be a new kind of product,” says Swain. The new product was ‘payments link,’ a simple online tool that allowed anybody with a bank account and a phone number to start accepting payments. With the payment link, which people can create themselves and share with their customers, Instamojo got the ball rolling.

With its focus on MSMEs, Instamojo assumes a special place in the digital payments ecosystem. While larger gateway players like CC Avenues, PayU and Billdesk focus on large enterprises, businesses like Paytm, Google Pay and PhonePe are solving for consumer payments. In the offline world, point-of-sale providers like mSwipe and EzeTap are solutions for merchants, small and large, to accept card payments offline.

As Instamojo made in-roads in payments, it expanded to ancillary services. In 2015, it introduced an online store-front, a basic e-commerce website with catalogs, pricing and direct ordering capability. The store-front is easy to create and manage, and comes free of cost with Instamojo’s payments service. As of date, over 60,000 online stores with over 6 lakh product listing are hosted on Instamojo.

Last year, the company launched a credit business called MojoCapital, to provide working capital loans to MSMEs, and in-house delivery business MojoXpress. With newer business lines, Instamojo is creating an offering which stitches together e-commerce, payments and lending. 

"We will build solutions, partner with other players or acquire assets under one of these three division, to help our customers start, sell, manage, grow,” says Swain. 

Even though there are an estimated 70 million MSMEs, according to official figures, Swain says Instamojo’s addressable market is nothing less than 100 million. “Most new age entrepreneurs would start their business on the internet. We are going after them,” he beams.