OKCredit, a bookkeeping app that aims to digitise accounting for small businesses in India, has come a long way in three years. Founded in 2017, the app enjoys over 5.5 million active users with around $7.5 billion (roughly Rs. 54,739 crores) worth of transactions recorded in the month of October. In this space, OKCredit has stiff competition from Khatabook, which achieved 10 million downloads through word of mouth within merchant networks within a year of its launch. However, OKCredit has been growing at a steady pace, OKCredit CEO and co-founder Harsh Pokharna asserts, with the company expecting its active user base to grow around 18-20 percent in this fiscal.

The OKCredit app is available free of cost on Google Play and App Store both. The company acquired seed capital from Lightspeed Venture Partners recently that should help scale customer base even more.  

Expert opinion: PN Sudarshan, Partner, Deloitte India says, “SaaS as a business model has proved effective in the digitization of small and medium enterprises around the world. India is an important market both from a supply and demand perspective. SaaS revenues in India have reached $3.5 billion as of FY2020 with 75 percent coming from global sales. From a demand perspective, India is going through mass digitization, which brings industry value chains into the digital fold enabling shared information exchange across the supply chain. Small and medium enterprises are an integral part of our manufacturing and services industries in India, and to truly achieve the potential of mass digitization, it is necessary that small and medium enterprises access enterprise-level software provisioned at flexible pricing models. SaaS as a business model is definitely well-positioned to catalyse this change and cost-effective digital tools would help us move from a ‘data-poor’ to ‘data-rich’ economy. The current COVID-19 pandemic has catalysed the rate of technology adoption across industries. In this context, SaaS as a business model can witness increased adoption, as flexibility and affordability becomes a key for enterprises to manage the pandemic response and thrive in the changing market dynamics.”

We spoke to CEO and Co-Founder of OKCredit, Harsh Pokharna to know how the company plans to tackle competition and its future plans.

CEO and Co-Founder of OKCredit, Harsh Pokharna

1.What were you doing before OKCredit was brought to life?

After graduating from IIT Kanpur in 2014, I and Gaurav took up a job at Flipkart. My friend and batchmate Aditya Prasad who is also the co-founder and CTO of OkCredit went on to work with a data company called Fuzzy Logix. The start-up ecosystem was just getting established in India and the three of us wanted to do something of our own. We built a few apps which did not work and even tried our hand at blockchain. In 2017, out of our own personal experience, we started OkCredit.

2. What was the conceptualization process behind OKCredit? When was it that you finally decided you want to start OKCredit?

We had a first-hand feel of the problem and that immensely helped us build a product that would solve problems not just for the SMBs but also his customers. While living in Bengaluru, we used to buy from this grocery store opposite our apartment. Once we went to the store to settle our month-end credit balance and we were astounded by the shopkeeper’s painful process of taking out each bill and calculating it up. The process was fraught with error and manipulation and wasted a lot of time, both for the customers and these shop owners. That’s when we decided that there was a need to make this transaction simple and smooth, giving birth to our idea of OkCredit.

3. Were there any operational challenges (or any other challenges) that you faced when starting OKCredit? Please offer our readers details on what those challenges were and how you overcame them?

The biggest challenge for us was the customer inertia in adopting a digital product. The ledger book culture is so deeply entrenched in India that many shopkeepers can’t even think of using an app to do calculations. For them, it’s a very precious thing and frankly, it’s heart of their business. Sharing that important document with a startup doesn’t happen easily. Secondly, the customer set we cater to is not necessarily the urban metro customer. In fact, most of the times, it’s a small business in a tier-2, tier-3 setting.

As a company that has learnt first-hand from its customers, we have worked a lot on building trust, being available always and making sure that the product evolves in tune with our customer’s needs. To that effect, we launched two more products this year which will go a long way in bringing small businesses up on the digitisation curve. Here again, we are trying to solve two major pain points. OkShop serves the need for offline stores and businesses who want to go online to maximise their business potential. OkStaff, our second initiative helps businesses with staff management, be it salaries, advance, leaves etc.

4. Did you have to put in any money to start the business? When did you decide that funding was required? Could you offer broad details on how a start-up gets funding in India and how OKCredit managed its first round?

Before starting OkCredit, three of us were working. I and Gaurav with Flipkart and Aditya with Fuzzy Logic. We had some savings. Later, we also did some consultancy work on blockchain that supported us financially for some time. But as our company scaled we needed more funds and resources to grow further. That’s when our batch mate and dear friend Farid Ahsan, also co-founder of ShareChat, stepped in and helped us out by offering us his office space. For the next three months his office space became our only abode, where we tirelessly and relentlessly worked towards developing OkCredit. Seeing our dedication and passion he helped us connect with Lightspeed Ventures, which became our first investors.

5. Could you share some interesting stories about your initial days? What learnings have you picked up from those hustle days?

We initially started off working solely with grocery stores, which we got through referrals. We wanted to expand our market reach and explore other segments. For that to happen, we started talking to people in the industry and upon that we realised that the same problem existed throughout all categories and supply chains. There was a dire need in the market for making account management simple and that the sector was marginally neglected. After that, we slowly started establishing ourselves and there was a spurt in demand for our products across all market segments and geographical regions.

6. Is there any incident that is monumental in OKCredit’s journey? Please share that incident with our readers.

The incident that is always going to remain close to our hearts is our very first user. The three of us use to share an apartment right opposite to a grocery store Food Choice, where we use to make most of our household purchases from. One fine day Aditya came back from the store and narrated the entire cumbersome process he went through at the store just to pay his bills. The storekeeper at the store would rummage through all his bills, tally them and would then ask you to pay your dues, which we aren’t entirely sure was ever accurate. This posed as a problem not only for us, but hundreds of customers and the shopkeeper himself. This led to the inception of OkCredit. The very first module we created failed, as it was so complicated for them to understand that they couldn’t operate it. So, we went back and forth to develop a mechanism that would come to his aid and was easy to understand and operate. Initially, the storekeeper had little faith in our app and use to maintain his books alongside, just to be sure. But, slowly he started gaining confidence in it and also gave us several other referrals. Since then we have added over 5.5 million active users and two more product offerings.

7. Could you help give a sense of how far OKCredit has come? From when it began to where it is now

In 2017, we started with 1 user and currently we have 5.5 million active users with around $7.5 billion (roughly Rs. 54,739 crores) transactions recorded in the month of October and its growing at a good pace. We have surpassed our pre-covid levels. We expect our active users to grow around 18-20 percent in this fiscal.

8.  Has there ever been any failure or challenges? Please offer detail about one significant incident and how you overcame that.   

We have had multiple failures throughout our journey. We have worked for multiple products and projects, many of which have ended up not working out. In a way they have all been our failures. However, we never gave up and continued to strive against all obstacles. We were very clear on what our mission and goal was, that is to help billion Indians and we did that against all odds. We never let our failures dull our ambitions. 

9. You’ve got competition via various bookkeeping apps including Khatabook? What differentiates you from Khatabook?  

Our biggest USP is that all our products are simple, secure, and technologically advanced. It runs on a basic smartphone and helps automate the entire process pertaining to the business transactions of retailers with their customers and with wholesalers. Users also get to keep track of the buyer’s credit and can also send them timely payment reminders. 

10. What was it like sailing through the COVID-19 crisis?  Did you see a fall in business or unexpected surge? How did you deal with it?   

During the nation-wide lockdown earlier this year, we observed that merchants had stopped selling on credit due to the uncertainty. Selling on credit is a pretty regular affair during normal times and hence there was a dip in the business. But as the lockdown eased, we saw that merchants used social networking apps like WhatsApp to sell their products and create catalogues to interact and sell to their customers, which soon became part of the new normal to promote contactless transactions. Having said that, our retention and revival post COVID-19 have been phenomenal and completely organic. 

11.  Any advice for young Indian entrepreneurs out there?    

The next era will be transformational for small businesses as both internet and software consumption is going to go through the roof. As more SMBs (small and medium businesses) come online, there is a huge opportunity to go deeper in this sector.  We would want to encourage budding founders and entrepreneurs to ideate about possible solutions to issues that SMBs are facing. We would also recommend them to focus on one very specific segment of business category in solving a problem. Initially, focus on one user and work around it to solve the problem efficiently so that you build your journey based on it. Focus on getting in depth information about the users while solving the problem so that they can adopt your product. Always have a long -term vision and create a sustainable product. It is important to understand that this market is just opening so there will be a lot of players but the key is to have a long- term goal and solve problems sustainably. 

12. What are the big plans in the future?    

With a suite of simple, mobile-first products, we are solving some serious problems for different segments of SMBs, giving us multiple entry points to kickstart their business digitisation journey. A strong network effect will be key to digitising the 50 million SMBs over the next decade. We intend to facilitate these small businesses to become at par with large e-commerce players in leveraging technology to service their customers as well as simplify procurement, and integrate them with the formal economy and digital ecosystem. 

13. What is the employee strength? Is OKCredit hiring currently?  

Currently, we have a team of 100 employees. And, yes we are actively hiring. When COVID struck, many companies were giving pink slips and deducting salaries but OkCredit stood with their employees. In fact, we have strengthened our team in 2020.