In continuation of our “Why we invested in (company)” series, we attempt to simplify the complexities of an investment and reasons behind choosing a company. The investment team provides its thesis and a brief investment case. Without further ado, let’s begin!
Artha India Ventures invested in Kredily, a cloud-based digital workplace platform for SMEs and MSMEs, integrated with curated financial products for employees. Kredily acts as a one-stop platform for managing employees digitally.
Kredily’s automated software streamlines the HR workflow while enhancing employee engagement and maintaining high-quality data. Kredily’s range of services includes data management systems for employees, automated payroll & payout management, tracking attendance and leave management, remote working support for its customer base, and much more.
Why does Kredily exist?
India is home to nearly 140 million salaried employees, but the existing HRMS platforms fail to cater to almost 90% of the market. Kredily’s unique business model of no offline marketing and no sales staff works digitally either through digital marketing, SEO (search engine optimization) or through its partnerships with banking, insurance companies, etc.
Kredily serves its clients by providing a digital workplace platform to SMEs and MSMEs following a freemium product strategy model.
Due to the looming uncertainty and greater focus on remote working, we believe an affordable platform like Kredily is the need of the hour for SMBs to help both employees and employers adapt to the current scenario.
Why did we invest in Kredily?
- We invested in Kredily because of a combination of factors like– the idea, product offerings, team, and their vision.
First, the idea behind creating the product is highly scalable because of the partnership model (with banking, insurance companies), which gives it a lead in the defined target audience, i.e., SMEs, MSMEs. The CAC (customer acquisition cost) is also low, which means that the fund requirement for sales and marketing is negligible. - Next, Kredily’s product is robust as it not only provides a solution to HRMS issues but also enhances employees’ engagement. It offers pre-integrated chat features like Slack and a video calling software like Microsoft teams. Also, it is India’s first platform for digital payouts by HRMS. For a better understanding of the product, we tested the product internally at Artha through one of our portfolio companies, which has over 100 employees. Everyone absolutely loved it. If you would like to integrate Kredily for your Company’s HRMS needs, click here.
- Third, we loved the founder’s clear vision. They want to be the category leader globally and earn via high yielding financial products like salary loans, health insurance, tax saving plans using a market-based model. It is an amazing combination of HRMS, online communication, and finance.
- Lastly, it is a team of experts with rich experience and great synergy that drove us to invest in Kredily. Devendra (the CEO) left his high-paying job to work towards making Kredily the best product, which speaks volumes about his commitment to building Kredily. We are very excited!
Why did we like Kredily’s team?
- Devendra Khandegar, the CEO and founder of Kredily, led the investments team at Tracxn Labs. An IIT- Kanpur and IIM-Lucknow alumnus, Devendra had worked and researched extensively on the HRMS space during his tenure at Tracxn Labs. During his research, he found out people do not want to pay for software in India without testing it for a long time.
He also developed the right knowledge base understanding the complexities of the industry. His research led him to find a great hook to monetize the rich data it has about employees and enhance their engagement while keeping the subscription to zero for as long as possible.
He has held different roles in his professional career, nurturing his leadership and managerial skills, and he is most suited to lead this venture to success. His experience of working on both sides of the VC table with an impressive background gives us confidence that Devendra and his team are well suited to help globally scale the Kredily. He also built a strong team from across the country, with expertise in various domains. - Mohammed Mustafa leads the engineering team at Kredily. His 11 years of experience in full-stack software development will help Kredily create the best website and mobile application. He, too, is an IIT-Kanpur alumnus. Kredily already has a robust website and an Android app that is available to beta users, with many more products to come to the market.
- TV Avinash Chandra leads the digital marketing team. He has previously led the teams at WorkEx, HealthKart, Zivame. His experience would help in increasing the reach and user base of Kredily.
The trio of Devendra, Mohammed Mustafa, and TV Avinash Chandra share a great synergy as they know each other from their IIT-Kanpur days!
How can we add value to Kredily?
- Our first order of business is to get all our portfolio companies onto the Kredily platform. Their freemium model will help our companies reduce their costs and increase productivity while offering Kredily a larger base of employees to work with. We expect our companies to flock to Kredily as it is free, simple, and increases productivity — what is not there for them to like!
- Second, we want to connect Kredily to FinTech or InsureTech companies in our network that would partner with Kredily to provide their services. We are sure that it would be a profitable relationship for both parties.
Third, we want to utilize our networks in other ecosystems in South East Asia, Middle East, and Israel to promote Kredily’s product. - Lastly, we will help connect him to local and global funds when the company is ready to raise more!
Where do we see Kredily in the next five years?
We see Kredily as the largest digital workplace platform for employee management and engagement globally.
In the coming five years, we anticipate Kredily to develop into one of the most trusted marketplaces for financial products in India with a full-stack HRMS platform providing a complete digital suite of products catering to over 2 lakh SMBs.
Following Kredily’s partnerships with banks, insurance companies, and fintech players, it will be an easy and phase-wise process to launch numerous financial products on the platform to enhance employees’ engagement. This would enable Kredily to become a strong fintech player in the market.
We believe that the EarlySalary loan product will cover the subscription cost of Kredily, and the company will become operationally profitable within the next two years.
In terms of revenue, Kredily is targeting an ARR of more than Rs 300 crore. The revenue is majorly a split of platform-based revenue and SAAS revenue. While the SaaS income would grow very slowly as seen in the existing HRMS platforms, Kredily will earn 90% of its revenue from its financial platform, i.e., by selling salary loans and insurance investments, credit cards, etc.
