MSME Super-app, HostBooks raises $3Million in Series-A Funding from Razorpay; Plans to Strengthen its Product Suite


Micro, Small and Medium Enterprise (MSME)-focused fintech start-up HostBooks today announced that it has raised $3 Million in a Series-A funding round led by Razorpay, one of India’s Leading Full-Stack Financial Services Company. HostBooks plans to utilize the fund to not only add new features to its existing product suite but also to develop innovative products including a deep learning-based Business Intelligence System and an AI-based Posting and Recommendation System.

Hostbooks intends to utilize the Series-A funding to further scale its operations and enhance its existing product suite with the launch of new products supporting order management, neo-banking, advanced inventory & production management and AI-based business decision making tools to better support its wide customer base in the country. With this, HostBooks will be a step closer to becoming a one-stop shop for all Business and Finance Operations needs of MSMEs in India.

Commenting on the announcement, Kapil Rana, Founder, HostBooks said “We are simplifying and automating the entire business process by focusing on the sources of the transactions, banking, accounting, and tax compliances with an integrated end-to-end business management solution. With the growth in the economy combined with tax norms, the process of accounting and statutory compliance has become more complex. HostBooks, with its large range of services like billing, accounting, inventory management, payroll, compliance management, banking, and advanced business reporting, envisages making the whole process automated, easy to understand, hassle-free, and efficient.”

“We share a common vision with Razorpay, which is to build the financial backbone for businesses in India and enable them to thrive. This funding is a major step forward in that direction. Through Razorpay’s support and expertise, we would not only be able to make business processes simpler for entrepreneurs but also give them the tools they need to fast track the growth of their business,” added Biswajit Mishra, Co-founder, HostBooks.

HostBooks has transformed tedious backend business processes including accounting and compliance for MSME/SME through a single sign-on collaborative platform. With over 250,000 businesses on its platform, HostBooks has been able to reduce costs of business operations by up to 70%. Along with many features, HostBooks also offers an in-built e-Document Management System with free cloud storage.

Commenting on this funding Harshil Mathur, CEO & Co-founder, Razorpay said, “Small businesses are a major driver of the Indian economy and we, at Razorpay have been on a mission to enable them in every step of their growth journey. It is promising to see that companies like HostBooks are playing a critical role in creating a thriving growth environment for small businesses. It gives me immense pleasure for Razorpay to be a part of HostBooks’ growth journey. With our shared vision of fostering growth for businesses with our unified financial management solutions, we would work together towards building a stronger, frictionless business operations SaaS and banking ecosystem for millions of MSMEs in India.”

HostBooks was founded by Kapil Rana in 2017 and was joined at an early stage by Biswajit Mishra. HostBooks is an innovative cloud-based financial platform that offers end-to-end solutions that cater to the complete value chain of businesses and enable them to automate their business processes. The platform caters to the complete value chain of business functions – be it handling F&A, Tax, GST, e-Way Bills, e-Invoicing, Banking, Inventory Management, Order Management, Billing & Invoicing, Cash & Bank Management, Business Intelligence, BP Portal, Procurement & Payroll.


Majority of MSMEs favour daily EMIs, automatic deduction from bank accounts for credit repayment, data from Solv reveals


Solv, a B2B e-commerce platform for micro, small and medium enterprises (MSMEs) conducted a survey of 1000+ MSMEs to understand their credit and repayment needs and preferences. The objective was to uncover insights to help various stakeholders address the USD 300 Billion+ credit gap in the MSME segment, especially considering the government’s recent guidelines bringing retail and wholesale trade under the MSME category. The new guidelines will potentially benefit crores of retail and wholesale traders, making them eligible for priority sector lending (PSL) benefits under RBI guidelines.

Credit Demand 

In terms of demand for credit, the survey found that 90% of retailer touch points across categories have seen higher sales in the last 3 months vis-a-vis 2020, implying a need for easy access to small ticket size collateral-free loans to improve working capital and sales. It also found that 90% of supply chain participants in high volume commodity segments are actively seeking collateral-free loans of up to Rs. 3 Lakh.

Repayment Preferences

The survey also uncovered interesting insights about MSMEs’ preferences for repayment. More than 50% of retailers and wholesalers said they are willing to pay in 7-15 days instalments. More than 95% of respondents indicated they would pay back loans within 30 days if given the option of daily repayment or daily EMIs. Most small retailers willing to pay daily EMI are comfortable paying Rs. 500 or Rs. 2000 daily to ease their repayment burden and help them get better access to revolving credit. Interestingly, more than 50% of micro and small businesses said they would like to ease the repayment process through automatic deduction from their bank accounts.

Collection of Payments

On collection of payments from customers, the survey found that while cash is still the most preferred mode, there has been a sharp 3X rise in collections through UPI vis-à-vis debit and credit card payments. 90%+ of small and micro businesses have a UPI QR code, while only 20% have a PO machine for debit/credit card acceptance in their shops.

Online B2B Platforms

Interestingly, more than 90% of small retailers, wholesalers and traders felt that online B2B e-commerce platforms customized for MSMEs would help them grow their business faster in terms of getting better rates to procure goods, accessing cheaper and faster credit, and increasing sales.

Solv has already launched Buy-Now-Pay-Later (BNPL) facility for the MSME sector. With the alternate data on its B2B e-commerce platform, Solv provides segment analysis to match financier and borrower requirements. New age fintechs and traditional lenders that are a part of Solv’s network of financial service providers, have been offering invoice financing through BNPL to small businesses via the platform. At a time when traditional lenders have been relatively risk-averse due to a weak economy, the BNPL facility has helped small businesses to service their immediate requirements without feeling severe financial strain, with more time at their disposal to make payments.