India’s first neobank for small business owners, has raised INR 400 Million in a Pre-Series B round for ramping up user acquisition and strengthening technology. The equity round was led by existing investor Aavishkaar Capital and the Rajiv Dadlani Group. It also saw participation from Earlsfield Capital U.K., and reputed Family Offices and HNI investors including Jeremy Lim, Bhupesh Kumar, Nilesh Srivastava, and others.
Chqbook had recently raised INR 75 Million of venture debt from Innoven Capital, to ramp up lending and is on track to meet significant customer demand for lending.
Since the launch of its neo banking platform in Sep 2020, Chqbook has received a phenomenal response where it crossed 1 million app downloads and has over 650,000 transacting customers. The Chqbook app now processes over INR 30 Billion of annualized transaction value.
Chqbook, through its full-stack mobile platform, re-bundles financial services for 60 Million Small Business Owners in India, giving them access to Current Accounts, a bookkeeping service for cash transactions, lending, and insurance. Across products, it runs a gamified reward program designed from the ground up for small businesses. Chqbook offers simple and intuitive user journeys in multiple regional languages for the small business owner community. Chqbook’s multi-product approach is effective because it holistically empowers small business owners by catering to all their financial needs.
In March ’20, Aavishkaar Capital had invested INR 350 Million in the first institutional funding round in the company. This brings their total funding in the startup to INR 850 Million since inception.
Vipul Sharma, Founder & CEO, Chqbook, said, “Through 2020, we built our multi-product stack and launched products which are now witnessing huge demand from the small business community. This has given us the confidence to double down and provide our customers access to banking, credit, and insurance. Across the country, over the next ten years, we expect small businesses to grow exponentially. In addition, the adoption of 5G services will expand the scope of services customers can access. At Chqbook, we are committed to solving for this community and aim to lend over INR 300 Billion, open 1 million accounts, and insure 10 million customers, over the next few years. Early days yet, but the accounts, credit, and insurance gap are so wide that the opportunity will require multiple players to join this movement.”
Rajiv Dadlani, from the Family Office of the Rajiv Dadlani Group, said, “The Founders having a strong pedigree and tremendous collective experience in the Fintech, Banking, Insurance industry, have built a robust management team and are doing a splendid job. There is a huge, inherent and unmet need for Chqbook’s products amongst small business owners, all over India. We are very impressed with their holistic strategy of leveraging technology and being a multi-product and multilingual app, which is truly complementing. Given their vision and strong execution, also neobanking being at a nascent stage in India, with huge growth potential, we are glad to partake as long-term investors, and support them in their amazing journey forward.”
Aakash Agrawal, Earlsfield Capital, said, “Earlsfield Capital has been focussed on investing in technology companies that are digitally transforming conventional sectors. There is a large opportunity in providing financial products and services to small businesses in India & SE Asia, which has largely been ignored by existing lending institutions/banks due to lack of infrastructure and unavailability of credit history, among other factors. We are excited to partner with and support the team at Chqbook through their growth, as they build a mobile-first financial ecosystem focussed on small business owners, with the potential to impact millions of MSMEs that form the backbone of India’s growing economy.”
Chqbook is using technology to service millions of sole proprietorships around the country as they enter formal banking – keeping costs low and removing the high costs of branch infrastructure and RM-driven models. Recent regulations that allow video KYC for sole proprietorship customers to open a current account pave the way for neobanks serving this otherwise underserved segment. Most of Chqbook’s customers are either banking with PSU or co-operative banks and have to rely on informal lenders for credit, and a majority don’t have adequate insurance.
Regulatory and mobile phone penetration tailwinds are helping Chqbook address the over $1 Trillion credit gap and improve the low insurance and formal banking penetration for millions of small business owners in India.
Source: Business World