Micro, small and medium enterprise-focused fintech startup HostBooks came to the limelight when it announced a $3 million Series A funding round led by fintech unicorn Razorpay in June 2022. Last week, Entrackr spoke to the company’s founder and CEO Kapil Rana to understand its growth, future plans, and its quest for providing comprehensive solutions for MSMEs.
Six-year-old HostBooks is a cloud-based platform that eases handling F&A, tax, GST, e-way bills, e-invoicing, banking, inventory management, and procurement & payroll, among others. In its early days, the company focused on small enterprises but later realized that the money lies with enterprise customers.
Rana explains, “After solely focusing on small and micro industries and several experiments for three-four years, we learned that they will not be a value-generating stream in terms of revenue.”
The pivot has worked well for the company and it claims to onboard 500K customers in the last two years. In 2021, it started making money by charging an annual subscription which ranges from Rs 5,000 to Rs 2 crore depending on size and scope of requirements.
The firm provides customised software for the manufacturing, trading, food and beverage, retail and services sectors. However, manufacturing alone comprises more than 30% of its customers. Focus on customization appears to have been a driving factor for its software suite.
“Different industries have different requirements and we customized heavily to weed out industry specific challenges and develop modules as per requirements,” said Rana.
Rana claims that HostBooks is generating over Rs 2.5 crore in revenue every month and it closed FY23 with more than Rs 18 crore in topline. “Besides India, we see sizable opportunities in Gulf countries especially in the food and beverage and hotel industry,” added Rana.
HostBooks competes with SAP, Microsoft, Oracle and Tally among others but it also complements them uniquely. “We integrate with the software of aforementioned biggies because they don’t provide a tax compliance solution or e-invoicing, which is the new concept in GST parlance,” said Rana.
For growth and developing new products, HostBooks is also setting its eye on new investments.
“We are in the process to raise a Series B round and currently are in talks with multiple investors,” added Rana.
