Employee management app PagarBook is in advanced talks to raise $7 million from Sequoia Capital, said three sources aware of the development. This would be the second funding round for the Bengaluru-based venture.
Sequoia is an existing investor in PagarBook via Surge Ventures. “Impressed with the initial traction, Sequoia is set to double down its stake in PagarBook. The talks have been on for the past two months and a term sheet has already been given by Sequoia,” said one of the sources on condition of anonymity.
PagarBook lets small companies maintain attendance, salaries, advance payments, payroll management. Its mobile app is available across 12 languages including Hindi, Hinglish, Gujarati, Punjabi, Bengali and Tamil.
According to PagarBook’s website, the company has 700K active businesses who have been using the app and it manages payroll of over 3 million employees. The app also allows businesses to generate salary slips, send notifications and generate invoices.
“If nothing goes wrong from here, the deal would be materialised by next month,” said the second source. The person requested anonymity as the talks are private. “PagarBook is likely to be valued in the range of $25-28 million in the fresh round.”
Founded by Adarsh Kumar and Rupesh Kumar Mishra, PagarBook has already raised Rs 15.2 crore and Rs 30 lakhs from Surge Ventures and Kunal Shah’s QED Innovation respectively. As per Fintrackr estimates, the company was valued around Rs 61 crore in that round and Kumar remains the biggest shareholder controlling 32.04% stake followed by Mishra who holds 26.21% stake. IQ Capital and Surge control 16.39% and 24.88% stake respectively.
While Sequoia declined to comment, queries to PagarBook did not elicit any response until publication of the story.
PagarBook is the second startup for Kumar and Gupta. Earlier, the duo built GyanApp that used to be a vernacular social media platform for quality knowledge sharing. Backed by India Quotient, GyanApp had shut down its operations in October 2019.
Sensor Tower data shows that PagarBook has over 2.8 million downloads with 752K monthly active users. The company has been solving a big pain for small businesses who can’t afford expensive software for managing employees’ payroll and attendance.
The pandemic has also shot its usage and this can be validated through Sensor Tower numbers. While the app had a few thousand daily active users (DAU) in March and April, it has DAU of 134K in the last 30 days.
At the moment, there is no direct competition for PagarBook. However, Entrackr sources outlined that Khatabook is working on a similar product and it may launch a separate app in coming months.