Tiger Global has led a $15.57-million round in Bengaluru-based digital credit ledger startup OkCredit that also saw the participation of its existing investors Venture Highway, Y Combinator, and Lightspeed India Partners. Morningside Venture Capital was the new investor participating in the round, OkCredit cofounder Harsh Pokharna told Financial Express Online.
Tiger Global contributed $10 million to the round raised by OkCredit, which will deploy capital primarily towards expanding its 12-member team and scaling its base of small merchants or retailers, that caters to their problem of managing credit they give to their customers even as customers get real-time updates of the amount due to the shop owners.
“We currently have 1.3 million downloads of the app out of which around 900k are our monthly active customers,” said Pokharna, adding that the app further solves the problem of fear of loss of credit data by shop owners since everything is on the cloud. Shop owners can also send reminders or automate the same through the app.
There huge gap in the market as small local merchants run their business by offering goods on credit to customers without which they would lose customers to other merchants. “So credit is a great sales tool,” Pokharna added.
The use case scenarios for the app includes recharge shops, kirana stores, bakery stores, medical stores, etc. OkCredit is currently present in over 1,000 locations that include cities and towns across tier I, II, III and beyond and has maximum customers in Hindi-speaking regions of the country.
OkCredit had raised around $2 million last year. The cloud-based software market for local merchants “is young and growing rapidly,” said Scott Shleifer, Partner, Tiger Global in a statement. The deal also marks Tiger Global continued focus on B2B or SaaS startups in India while continuing to invest in B2C deals as well.
The fund has backed multiple B2B startups including CheckMate, Facilio, Fyle, Innovapptive, Clevertap etc., after a virtual freeze of investing in startups after 2016 funding slowdown.
Such businesses are better scalable than B2C wherein you first acquire customers and then build a business model around it. In B2B or enterprise businesses, the possibility of expanding it faster is not restricted to the local geography. Hence it offers a much wider market to exploit, Founder and Managing Partner at Unicorn India Ventures Anil Joshi had told Financial Express Online.