Sampad Swain, the co-founder and chief executive officer of payments and services start-up Instamojo, calls himself god’s luckiest child. His company, which started in 2012, has been on the verge of shutdown thrice in the past, but has always been rescued by investors.
The Covid-19 pandemic, which had put a question mark on the company’s performance, is now turning out to be a life altering event for the company. So much so that the Kalaari Capital and Blume Ventures-backed company claims that it becane profitable in June backed by new product launches and zero cash burn.
“We have seen transactions on our platforms growing between 20-30 per cent in all the verticals we cater to, except for travel,” said Swain. In the past 90 days, the company said, it saw transaction volume on its platform for food retail category grow 4.5 times and edtech sector by over two times. Similarly, financial services and B2B ecommerce segment also grew two times.
The pandemic has forced small merchants to come online and start selling. As a result, the company’s acquisition of Gurgaon-based GetMeAShop, which helps small businesses come online, has provided an upper hand to InstaMojo, which is now adding up to 1,500 merchants per day on its platform without burning any cash.
“Pre-Covid-19, we used to spend on acquiring businesses, but for the past three months we have stopped all paid campaigns. We are following a zero customer acquisition cost model now,” says Swain, who claims the Bengaluru-based company has added 150,000 small businesses and neighbourhood stores online since the lockdown taking the total base to 1.3 million. The company is also touching Rs 2,000 crore of GMV (gross merchandising value), all from these micro businesses. It also has plans to enter global markets by next year.
The company has also rolled out over a dozen new products since April in order to remain relevant in the market. It is planning to double its Instacash offering, a short term loan, under which merchants can borrow up to Rs 1 lakh for a period of either 7 days or 14 days. Instamojo’s flagship Sachet Loans on WhatsApp, which are small loans that go up to a ticket size of Rs 20,000 has seen over 300 transactions post lockdown with average loan size of Rs 6,355. It has also introduced mojoPlus, a reward program for merchants where they can earn points on collecting payments using Instamojo.
“We quickly released some features even if they were not 100 per cent ready and fixed them on the go as user feedback kept pouring in,” said Swain. The aim is now to gain market share at a faster rate, become a cohesive platform for micro businesses and double the business from FY20 to FY21.