Recko, an enterprise fintech start-up, has raised $6 million in a Series A round led by Vertex Ventures SEA and India. Existing investor Prime Venture Partners also participated in the round.
Founded in 2017 by Saurya Prakash Sinha and Prashant Borde, the company has built a Software as a Service-based financial reconciliation product to track entire transaction lifecycles and commercial contracts for businesses. It counts the likes of Grofers, Meesho and Dunzo among its customers.
The new funds will be used in developing the product further, hiring and expanding presence outside India.
“If you look at us as a company, there is a massive volume of transactional data which comes in and we have to store this information and make it available to all our clients at any point of time; that takes a lot of engineering bandwidth so that is the first place a lot of this investment is going to go,” Sinha told Entrepreneur India, adding that the company is also looking to hire for certain senior leadership roles.
According to the company, digital payments in India are expected to more than double to $135.2 billion in 2023 from $64.8 billion in 2019.
Bengaluru-based Recko automates reconciliation and allows data to be traced throughout the transaction cycle. How it does this is by getting connected to payment gateways, banks and merchant’s order management systems through application product interfaces (APIs). This helps customers track receivables and identify settlement discrepancies.
“Like several others before it, we believe that the CFO function will see high quality platforms driving disruption in the way processes such as reconciliation are managed, and high-quality software, along the lines of what Recko is developing will make complex problems look trivial,” Vertex’ Piyush Kharbanda said in a statement.
The product allows finance functions to reconcile millions of transactions, and reduces the time required to do so by a significant margin. Recko claims it reduces manpower by 50-80 per cent.
Sinha says, “When we started, we did as an additional reconciliation platform; for example, if you go to Dunzo, a lot of people would be making transactions and after two-three days, they would be receiving a lump sum credited to their bank account, that is the place where we come in and ensure that they have received the right money at the right time with the right set of charges. Then our clients started telling us that we have a lot of different channels, so then we started adding different flows such as cash on delivery, aggregators et cetera, so that’s where we stand right now.”
Since inception, the company has reconciled transactions worth $5 billion and the plan is to reconcile $10 billion worth of just digital transactions by the end of 2020.
The company has also started to work with various banks, non-banking financial companies and those in the insurance space, and is currently running pilots with them.
“Recko is solving a very complex problem for the finance teams who are dealing with complexity and a good amount of transactional volumes on a daily basis. This is an area that hasn’t seen much innovation in the Indian technology ecosystem, despite the massive addressable market,” said Sanjay Swamy, managing partner at Prime Venture Partners.
On expansion outside India, Sinha said they had done some client onboarding in the US and are currently running pilots in South East Asia.
Source: Entepreneur India