While the worlds are locked down there are many innovations happenings to run businesses from home. One such innovative initiative is HostBooks.
Founded in 2017, as a startup from Gurgaon, Hostbooks developed a unique and comprehensive platform for financial management. In an exclusive interaction with Mr Kapil Rana, Chairman and Founder, HostBooks Limited, Faiz Askari found some interesting insights about this startup and fintech’s industry.
FAIZ ASKARI: To begin with, can you give me a brief overview of the core idea behind launching this platform? How did the HostBooks start?
KAPIL RANA: Definitely, that’s a good question to start with. I have an accounting background, and I’m a Chartered Accountant and a CPA. The computer has been my core interest. When I was doing my article ship, (the article ship you do as a CA) and was working with my principal chartered accountant, we used to work on numbers of accounting software for our clients. They were all manual, you had to input every data, transaction again and again. The input was the same but we had to use the same data multiple times. Secondly, we were extremely busy with a hectic schedule due to many compliances every month. Thirdly, every businessman was dependent on us for specialised knowledge about accounting software and we were their point of contact for anything related to accounting. Even recurring entries, we had to do it again, for Income Tax challan, we had to make an accounting entry and then file TDS return. There were various problems and we had different applications for different complaints. Accounting, VAT, Sales Tax, Service Tax, TDS all had different applications and required expertise on all the software.
There was a dependency on location as well as hardware. We also had to physically go to the office and sometimes work till 12 at night to meet deadlines. Sometimes software doesn’t work on particular hardware, the requirement of a different operating system and various other problems. Another issue was the physical filing of documents, with thousands of files it used to take hours to find the file physically.
I faced the same problem during my article ship and when I started my practice, that’s when I thought of launching an application but in India there were multiple compliances due to each state’s different VAT and other taxes. When I heard the Government of India was planning to implement GST, then I was convinced that we can have our own application. At that time we were working with Intuit in the USA, and we had a similar requirement in India like their process, through which they were operating smoothly.
I came up with the idea of launching HostBooks to overcome all these problems with all-in-one cloud-based solution to solve all these issues.
FA: You spoke about how it all started and you felt the need of a platform which can help people to keep data in a more organized manner and the scalability that can be taken care of so the concept of cloud came into the picture. So is that how you started thinking on Hostbooks or what was the next step you had taken?
KAPIL RANA: In 2017, the government implemented GST, and there were a lot of problems that businesses were facing, everyone was in a hurry and it was messed up. We started working on our applications, particularly Indian applications. We launched our application in January 2018 and were running online campaigns. We were asking people for the problems they were facing, and got more than a million queries, while we were running our Google adverts and people were calling us so we filtered our applications on the basis of those problems.
FA: How many people or users did you interacted with in terms of their experiences related to GST?
KR: More than 1 million queries we received. Based on this data we developed our platform.
FA: Now coming to the company and the product standpoint, have you gone for some kind of venture funding?
KR: It has been funded by me till now. But now we are looking for investments.
FA: What kind of investments are you seeking?
KR: We are looking for around 25 million USD.
FAIZ ASKARI: What are the areas you would like to use this funding?
KR: Major focus would be marketing. Our application is ready. R&D will always be ongoing, as we believe there is no limit for improvements.
FAIZ ASKARI: How many users do you have at this moment and is it available for commercial use?
KAPIL RANA: Yes it is available, commercially for the last one year and we have more than 45,000 customers in India. Moreover, we are now registered with GSTN, and are a GST Suvidha Provider. We also have an MoU with Institute of Chartered Accountants of India to promote automation amongst Chartered Accountants.
FA: With regards to the technology how do you differentiate in the market?
KR: We don’t have any competitor in India, we are a cloud-based all-in-one application with separate database. It is a modular format. Our database is in different formats too.
FA: How many people are working with you and how many are working in software development?
KR: We are a team of 275 people. About 100 people are working in software development.
FA: In today’s scenario, due to the outbreak of coronavirus people are more inclined towards digital adoption, how do you look at this scenario for your business?
KR: This is not different situation for us because the millennial and the new generation is totally different. They are used to working on mobiles, cloud or consumer apps like Paytm. They wouldn’t prefer going to office for accounting purposes. In our case, they can have access to their accounts wherever they are, even if it is in a remote place. We want to make them independent, during the current pandemic, people can have access to accounting process from anywhere, anytime if they are using HostBooks.
FAIZ ASKARI: In terms of your expansion plan, is there any strategy that you have implemented? What kind of geographical expansion you expect to achieve in the next 1 year?
KAPIL RANA: India was totally different before GST and it’s totally different now. Earlier, people used to come to our office on last date of deadline. Now, after GST they changed the way businesses operate in India. It is necessary to make compliance now. There are 1.3 crore GST registered users in India and about 5 crore general stores in India, hence it is a big market and within a year we are looking for hundred thousand customers and are planning to capture at least 25% of registered GST customers. It’s a 50,000 crore business in India. The problem was before GST, but now the Government is pushing people for compliance. We have a Pan-India presence, doesn’t matter whether it’s rural area or metro cities we are everywhere in India.