SME Tech Startup Tranzact Raises $7M
TranZact also plans to invest in new talent and expand its team across all functions.
TranZact, a SME Tech startup offering a SaaS-based digital transformation tool for SMEs has raised $7 million in Series A funding. The funding was led by SF-based Tribe Capital with participation from Prime Venture Partners, Gemba Capital and existing investor Kae Capital. Several noted angel investors also participated in TranZact include Suhail Sameer - BharatPe, Sriram Krishnan - Ex Spotify/Tinder, Zetwerk Co-Founders, OfBusiness Co-founders, Devendra Rane – Paytm, Giridhar Malpani – Climber Capital, and Krishna Khandelwal – Locus.sh. The investments will help accelerate TranZact’s product-led growth vision of onboarding over 1 million SMEs in the next 12 months. The startup will use the fresh capital for product innovations that bring simplicity, leverage evolving technology, and harness the power of data to help SMEs grow better. TranZact also plans to invest in new talent and expand its team across all functions.
Founded by Ritesh Kumar, Sharad Sen Sharma & Rohan Sen Sharma, TranZact is helping Indian SMEs digitize and automate their entire business operations -from customer inquiry to dispatch. TranZact helps SMEs make data driven decisions for key business operations and focus on growth by streamlining Inventory, Purchase, Sales & Quotation management processes in a hassle-free and user-friendly manner. The software is free to signup and gets implemented within five working days with a 24/7 customer support team to handle any issues. Since its inception in 2017, TranZact has on-boarded more than 20,000 SMEs across industrial, electrical, and electronics, chemical, and packaging sectors. These SMEs have seen a 20% increase in the speed of document creation, 75% decrease in stock variance and the senior management are saving more than saving more than 2 hrs everyday in regular operations. Over 80,000 monthly GST documents have been created and TranZact is recording monthly transactions worth over $150 million.
The Small and Medium Enterprises (SME) sector has emerged as a highly vibrant and dynamic sector of the Indian economy. Digitisation is a great way of building a robust and conducive business environment for SMEs which provides enormous opportunities to the enterprise and enables them to compete globally. Many SMEs and startups in the last year have upgraded their technology by enabling online business models for consumer transactions, listing products/services on marketplaces and aggregators and scaling their back-end systems. A study by Google-KPMG showed that digitally-empowered SMEs have about twice the revenue growth projections in comparison to offline SMEs. According to research done by the Boston Consulting Group (BCG), SMEs that adopt new technology have 10 points higher job growth and 11 points higher revenue growth than low-tech SMEs.
Although there is a visible shift in SMEs, many in the manufacturing & trading sectors are still lagging behind in digitisation. Family owned SMEs have unstructured workflows across multiple departments. TranZact helps such businesses to structure the entire business process by enabling the entire team to work together on a single platform. TranZact also seamlessly integrates with existing tools like Tally and Excel enabling smoother interactions and less miscommunication. All critical data is available in real-time on a mobile device, where the company and its employees can access it any time from virtually everywhere.
According to a latest report by Zinnov, the number of SMEs in India is estimated to increase from 75 million currently to 105 million in 2024 out of which 90% would be ‘digitally influenced’. From estimated $30 billion in 2019, the market opportunity rising from digital technology adoption among SMEs will grow at around 25% CAGR to around $85 billion in 2024. With such rapid progress, it has become imperative for businesses to digitally transform as adoption of technology is no longer an option but a fundamental requirement. TranZact is working with thousands of SMEs in India towards this goal and to turn traditional business models into innovative and effective models capable of competing globally. Instead of worrying about operational details, it enables SMEs to focus on growth and improve their business efficiency.
Ritesh Kumar, Cofounder, TranZact “Traditionally, SMEs in India have been slow to adopt technology but we are seeing a considerable shift and instead of complex softwares and large investments, SMEs are looking for agile, quick to implement, simple tools to achieve digital transformation. With the government pushing to get ‘Vocal for Local’, businesses are looking to modernise their operations for better customer experience and more robust bottom-line growth. Our vision is to build an intelligent layer on top of the SaaS platform to create a transaction-backed marketplace where SMEs can discover new customers, suppliers, finance partners, logistics partners and receive other value added services. The initial response for TranZact has been fantastic and we are extremely excited about Tribe and Prime joining us in the endeavour of digitising the SMEs in India at scale.”
Arjun Sethi, Co-Founder and Partner, Tribe Capital “In India, SMEs have historically struggled to pursue more than one growth path at the same time due to a lack of cost-efficient and easy to implement digital transformation solutions. TranZact solves this core need by efficiently leveraging their ‘free’mium plan and simplified onboarding process to onboard new customers. We see great potential in TranZact and its solutions portfolio in providing SMEs with the necessary digital edge to successfully grow their businesses.Tribe is also excited about supporting businesses which are building for India and present a massive opportunity to transform various sectors through technology.”
Luke Erickson, Partner, Tribe Capital “There are not presently great ways to identify, invoice or manage complex supply chains in India. TranZact is breaking a pattern of more archaic systems by providing the most complex supply chains in India with a better way to interface with each other. We've been incredibly impressed by the Tranzact team and their ability to design a viral adoption loop that sustains by shifting the existing manual workflows to automated and scalable digital ones.”
Shripati Acharya, Managing partner, Prime Venture Partners “We are delighted to back a stellar team solving a core challenge which directly impacts the Indian economy. We are buoyed by the growth TranZact has witnessed until now and excited about the massive opportunity ahead in digitising SMEs in India. Digital SMEs will power India's $5 trillion GDP ambition and TranZact will play a very big role in making this happen. We are also extremely excited to partner with Tribe Capital in this round and look forward to building a rockstar company together.”
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