Khatabook acquires Biz Analyst in a $10 Mn cash and stock deal

Khatabook has acquired Biz Analyst, a SaaS business management application, in a deal worth $10 million and comprising cash and equity. Following the transactions, the B Capital-backed firm will absorb the entire team of Biz Analyst and the Mumbai-based startup’s co-founders Vaibhav Vasa, Mehul Sutariya, Nilesh Zaveri will become part of Khatabook’s leadership team.

The Biz Analyst team will continue to run independently, said Khatabook in a press statement.

Biz Analyst’s offerings would help existing merchants on Khatabook to enhance efficiency and business through analytics, sales force automation and digital invoicing. The acquisition appears to be in line to bolster its e-commerce enablement product MyStore and compete holistically with the competition including OkShop by OkCredit, Digital Showroom by Dot and Dukaan.

Biz Analyst is a five-year-old company that provides software solutions to SMEs to manage sales, inventory, outstandings and productivity. The company claims to have over 80,000 paid users and it aims to double the user base in the ongoing calendar year.

“This deal is our first strategic acquisition as we intensify our network effects up the supply chain and focus on monetization. The features and strengths that Biz Analyst offers are the perfect extension to our present business portfolio,” said Ravish Naresh, CEO and co-founder of Khatabook in a statement.

The development comes at a time when the digital ledger app is exploring new revenue streams. The Sequoia Capital-backed company is reportedly planning to offer credit and insurance products for its merchants.

Apart from bookkeeping, Khatabook also has two separate apps for SMEs -- MyStore and Pagarkhata for staff management. The three-year-old company has over 10 million monthly active users. Importantly, Khatabook’s closest rival OkCredit also has two separate apps with similar functionalities and target audience.

Exploring new revenue streams is quite obvious for companies like Khatabook and OkCredit that had registered zero operating revenue in FY20. While Khatabook spent Rs 127 crore in the last fiscal, OkCredit’s total expenditure during the period was recorded at Rs 157 crore.

Besides their core business, Khatabook has been competing with Dot, which has just raised $23.4 million from PayU, Google and InfoEdge. Entrackr had exclusively reported the financing round that valued it over $84 million. According to Entrackr’s sources, Dukaan is also in talks with multiple investors to raise a larger round. It had raised $6 million from Lightspeed and Matrix in October 2020.