OkCredit, a Bengaluru-based FinTech startup that helps India’s small and micro-merchants move their finances from paper to smartphone, has raised $67 million in a Series B funding round led by investors Tiger Global and Lightspeed.
The new round comes shortly after a Series A in June this year and soars OkCredit’s total funding raised to $83 million.
The 2-year-old company helps roadside stores, mobile recharge shops, pharmacies, and other small merchants better manage their finances by digitising their bookkeeping, thus improving margins and cash flow.
Its app can run on a basic smartphone and helps automate all of a retailers’ transactions with their customers and wholesalers.
OkCredit founders told TechCrunch in an interview that the app had amassed over 5 million active merchants across 2,000 cities in India.
Amy Wu, a partner at Lightspeed US, said OkCredit’s active users have grown more than 70 times since the start of the year. “It’s one of the fastest-growing companies we’ve seen and reflects the incredible virality and network effects of the business,” she added.
Changing payment methods
According to The Economic Times of India, in the nation, close to 40% of sales at a neighbourhood store are made on credit, but in recent years technology has slowly started to creep in and be adopted by this merchant base.
“Technology has moved from collecting payments in cash, to using point-of-sale machines. More recently, QR codes, paper bills turned to printed bills. But the one thing that has not changed is the fact that most customers still purchase goods on credit recorded in a notebook,” Harsh Pokharna, Chief Executive of OkCredit, said in a statement.
Pokharna, who is also a partner at Lightspeed, told TechCrunch that the startup will use the capital to hire more people and grow its merchant userbase. The startup is also looking into creating more solution for merchants.
“Technology adoption in India will happen across sectors and segments,” said Pokharna. “For the longest time, mSME as a segment was ignored but we have seen through Udaan, OkCredit and other Lightspeed investments in the SME space that tech usage is growing rapidly. Very excited and honoured to have a front-row seat in this journey!”