Swipe: Simple billing and payments for SMBs in India (getswipe.in)
There are 75m SMBs currently operating in India, with 105m projected in 2024. This segment struggles to make compliant invoices, collect and reconcile payments and manage monthly tax filings - mainly due to a mismatch of needs from current tools and software. More over, 90% of these SMBs (67.5m) rely on manual processes, which increases risk of human error, misrepresenting SMBs accounting. When compared to other countries, Indian businesses have been slower to take up software solutions to solve these issues - but thankfully, this pace is increasing as companies like Swipe address their needs acutely.
Product
Swipe aims to automate and digitise these accounting, billing and tax pains, becoming the ultimate end-to-end software stack for SMBs. It allows merchants to invoice customers over WhatsApp (and email), collect payments from anywhere and automate tax compliances. These merchants can then track invoices, day sales outstanding, accounts receivable, tax filings and more, all in the Swipe web app. Starting with automated billing and invoicing, they plan to expand into other product lines addressing deeper, small business pains, increasing share-of-wallet and net-dollar retention.
Early traction
TX volume and users have been growing ~50% MoM over last 6 months 🤯
Market & Competition
Khatabook ($400m raised) offers a similar value prop, but primarily focused on non-incorporated companies.
Vyapar, myBillBook and Tally all categorised as similar, but overall are quite complex, hard to use and not use-centric.
Tailwind(s)
3 tailwinds:
In recent years, India create UPI (unified payments interface), a free person-to-person & person-to-merchant payment method.
Mobile phone and internet penetration: 53% of India’s total 1.2B population accessed internet via mobile phone. Expected to grow to 96% by 2040 (source: Statista)
Whatsapp: given the above 2, Whatsapp is the top app in India for both Google Playstore and Apple App store.
Taking all three together: Swipe offers a mobile-friendly accounting & billing product to merchants, offering UPI over Whatsapp.
Team
Very strong technical founding team in Aditya and Sri. A lot of hunger and foresight into the market, and highlighted this core manual billing processes from other ventures previously tried.
Aditya Vemuganti, cofounder and CEO (ex-Amazon)
Sri Teja, cofounder and CTO (ex-Great Learning)
Go-to-market strategy
My favourite part about Swipe: growth and distribution is baked into their product, with a strong payment/invoicing growth loop driving B2C2B acquisition. This is immediate strong product-channel-fit.
Each invoice sent to collect a payment from a business or consumer- whether via Whatsapp or email - has a Swipe link for those receiving invoices to try themselves (if they have a small business). Naturally, this doesn’t resonate with everyone, however, it is an incredibly low cost acquisition strategy as their merchants become acquisition channels themselves.
As more merchants send more invoices, more potential users see the seamless process - and start using themselves, who in turn send invoices to their own customers. The more they grow, the more invoices sent, the more visibility on new users trying Swipe.
Combine with this baked-in distribution, the product itself is above and beyond, where merchants are naturally sharing the product outside of sent invoices, growing word-of-mouth.
The future is bright as they can build on this foundation by layering more micro growth loops together, such as, paid ad loops, partnership loops, sales loops (if they swim upscale) and company-generate, company-distributed content loops.
Risks
As with all startups, there are inherent risks. In India specifically, UPI (unified payments interface) is completely free - which is great for consumers - however, this gives Indian fintech’s a tough time figuring out how to monetise.
Main risk is not finding the correct monetisation model. If per-transaction is off the table given UPI, subscription models can also be tough in India. An example, only 30m (out of 75m) Indian businesses currently pay for a software subscription.
Another risk is building a platform around a product that could be subject to change. Facebook just made a major change - Meta - so what’s to say they do/don’t change Whatsapp which could negatively effect the invoice distribution of Swipe. Facebook have a history of hurting businesses built around their platforms.
Deal
SAFE from YCombinator.
Summary
Very solid, technical founding team. Found the market problem first hand and decided to tackle it. Great product with very strong signals of traction and PMF. Conviction in the team, traction on product, market size is large and can focus on 1 market (India), distribution is baked into the product and tailwinds all outweigh the risks.