How KhataBook Grew From Simple SMS App To Leading FinTech App In India

If you are an Indian citizen living in any of the urban cities of the Country, you might not have heard of this application until recently when the Indian Cricket Team Captain Mahendra Singh Dhoni, invested in a startup called KhataBook.  The question that was on many minds when Dhoni invested in this startup was what is KhataBook doing that has made Dhoni, one of the most popular celebrities in India, invest in this finance technology.  However in order to answer this question, we need to understand how KhataBook came into being and what it is today.

Beginnings

KhataBook was founded by Ravish Naresh, Dhanesh Kumar, Vaibhav Kalpe and Ashish Sonone in 2018.  The idea for KhataBook however has been on the minds of the founders for a long time before 2018.  It all began when Ravish Naresh along with his friends began a digital spending manager app called Kyte.ai in 2016.  The app lets a user understand their spending patterns by making use of the transactional SMS alerts.  The initial traction for Kyte was good but the growth was not reaching the scale the founders had in mind.  After researching the user data they realized that most of their users are based out of metro cities.  Upon digging deeper the data revealed that first time online users did not deal in digital transactions. They were still relying on traditional ‘khata,’ or ledger books. That is when the idea for KhataBook materialised for the Kyte team in 2018.  ‘Khata’ simply stands for account in Hindi.  

Growth

In 2018, the Kyte team decided to work on a simple cash management application called KhataBook on the premise that a real life ‘Khata’ can be replaced by a digital ‘Khata.’  The idea was to shift the focus of small time traders and businesses to move their accounts to digital platforms.  The team also included Kyte’s SMS checking mechanism to track data and provide free SMS updates on a user’s customer transactions.  This feature has ensured a three times faster return on credits for their users. The app has recorded $ 5 billion+ cash transactions by November 2018.  What makes this app attractive is that it employs artificial intelligence to track SMS alerts for transactions and use that to keep a track of accounts and spending.  With the internet penetration Reliance Jio offered, it was easier for KhataBook founders to target users in smaller cities and towns.  KhataBook is unique in the finance technology sector and has no major competitors.  However, OkCredit and Vyapaar app are the closest competition KhataBook has in the market currently.

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Kyte is still an ongoing process for the founders of KhataBook, but KhataBook has managed to record 100x of Kyte’s users.  KhataBook currently has 5.5 million active users per month and the startup aims to reach 20 million active users by the end of 2020.

Upon reaching a quick growth KhataBook got its first big publicity push when Dhoni invested an undisclosed amount in the startup and also became its brand ambassador.  KhataBook is now being used in more than 5000 cities and the users range from kirana shops, merchants, recharge shops.  The app currently supports eleven languages and even has users in Nepal, Pakistan and Bangladesh.