GyanApp to PagarBook: An Inspiring Journey of PagarBook’s Founders
Join us as we embark on an inspiring journey, chronicling the transformation of a startup from a humble consumer social media platform to a leading B2B SaaS company. Along the way, the founders faced numerous challenges and gained invaluable insights that can inspire and guide entrepreneurs facing similar situations. But before diving into their incredible journey, let’s take a moment to meet the visionary minds behind PagarBook who have significantly impacted India’s MSME landscape.
Beginnings 👣
Rupesh Mishra’s entrepreneurial journey began at MNIT Jaipur, where he founded several ventures that encountered failures of varying degrees. Despite these setbacks, Rupesh remained determined to succeed and left his first job to pursue his passion for entrepreneurship.
In late 2016, Rupesh crossed paths with Adarsh Kumar, an alumnus of IIT Bombay, who was working as a software engineer for a startup at that time. Their introduction was arranged by Anup, Adarsh’s senior at IIT Bombay, and Rupesh’s mentor at Super 30, a renowned program that prepares underprivileged students for the IIT JEE entrance exam. From the moment they met, Rupesh and Adarsh recognized their shared vision for positively impacting the lives of non-English-speaking people in India.
Founding GyanApp and Fund Raising 💰
Adarsh knew India Quotient’s founding partner, Gagan Goyal, a fellow IIT Bombay alumnus. Rupesh and Adarsh frequently consulted Gagan to validate their startup ideas. During a visit to the India Quotient office, Gagan introduced them to Anand Lunia, another founding partner, who offered them office space and provided further guidance on their ideas.
In 2017, the duo founded Aetlo Tech, a blockchain-based enterprise solution for trade finance and health insurance, which was later acquired by Page Solutions in 2018.
Then, Rupesh and Adarsh teamed up with Arya Adarsha Gautam, a friend from IIT Bombay who was working at Citibank at that time, to create their next venture.
Recognizing the shortage of educational content in regional languages, in July 2018, the team launched GyanApp — India’s pioneering knowledge-sharing platform designed for non-English speaking users. Their goal was to create a localized version of Quora.
The success of platforms like Quora and Reddit in the USA and the anticipation that India’s internet boom would mirror China’s fueled the trio’s optimism. Seeing their hard work and conviction, India Quotient decided to back them with pre-seed and seed funding.
Within just nine months, GyanApp had amassed a 2 million monthly active user base — an impressive feat for any startup! As GyanApp gained traction, the team received a Series A funding term sheet from a renowned VC fund.
Challenges in Scaling 📈
GyanApp encountered significant growth challenges while striving to scale its user base from 2 million to 100 million. Despite implementing various SEO and paid ads efforts, they lacked the necessary virality factor to attract and retain users. The company transitioned to knowledge commerce, offering paid educational content. However, they faced fierce competition from free educational content on platforms like YouTube, making it challenging to attract buyers.
After much consideration, the team concluded that proceeding with the Series A round without a clear path to success would ultimately lead to wasting their investors’ money. They chose to be transparent with India Quotient and shared their findings. In addition, the team made the responsible decision to return the remaining amount from the previous funding rounds to India Quotient.
The India Quotient team valued their honesty and advised founders to explore new opportunities while keeping the funds. Rupesh says, “This kind of faith and trust from our investor was invaluable for us in that tough phase.”
The founders shut down GyanApp in October 2019, downsizing the team to four members, but ensured their former employees found suitable positions elsewhere.
Quest for a New Direction 🔍
After the closure of GyanApp, Rupesh, Adarsh, and Arya faced a lot of anxiety, but they supported each other morally. To explore new opportunities, the team devised a framework for launching a product catering to non-English-speaking users.
Their primary focus was achieving high user retention, with a minimum target of 80% of users consistently returning. They also aimed to attract users with adequate disposable income to ensure effective monetization. After conducting research, the team identified small business owners as the target audience for their new product.
The trio ran Facebook ads targeting small business owners, generating around 600 responses from various cities. They arranged meetings with nearly 300 business owners from different industries in cities like Surat, Ahmedabad, and Patna. During these meetings, the trio identified several obstacles hindering small businesses’ productivity. They brainstormed potential solutions, such as creating an international B2B commerce platform and developing vernacular versions of Tally or Zoho Books.
They regularly shared their ideas with Anand at India Quotient, who, unfortunately, rejected all of them. However, Anand didn’t leave them empty-handed. He took the opportunity to explain various business concepts, expanding their knowledge in the process. Rupesh says, “Anand supported us morally, but his rejection toughened us up, and his explanations made us grow.”
Amidst their meetings with small business owners, the trio uncovered a prevalent challenge for SMEs: Employee Management. In India, where small businesses employ most of the workforce, the absence of effective workforce management systems poses a significant obstacle. Accurate tracking of attendance, wages, and advances is crucial for businesses operating on narrow profit margins.
Unfortunately, the problem is compounded by high turnover rates and a reliance on manual record-keeping practices. This issue not only affects businesses but also has far-reaching consequences for blue and grey-collar workers, who couldn’t access essential banking and insurance services without proper employment records.
Pivot to PagarBook 🗂️
During their pitch to India Quotient, the founders shared their vision of building a B2B SaaS solution for digitizing attendance and payroll systems for small businesses. They also proposed developing financial products to enhance the lives of blue and grey-collar workers. Recognizing the idea’s potential impact on millions of workers in India, India Quotient swiftly agreed to support them. Rupesh says, “This was the pivotal moment that marked the beginning of PagarBook.”
Within 15 days, the trio developed a basic version of their app, which was launched on December 1st, 2019. To better understand their users’ needs, the trio visited Surat, where they met with over 30 users, listened to their feedback, and examined their hand-drawn user interface designs. Consequently, the trio recognized the importance of a simple and intuitive interface for attracting a large user base.
In February 2020, the team’s blog caught the attention of Rachit Gupta from Sequoia Capital, leading to their acceptance into the Surge program and subsequent $2 million in seed funding. In the next seven months, PagarBook’s app went from a few thousand to more than 5 million downloads on the Play Store. Thanks to its 100x growth and promising traction, PagarBook secured a $15 million Series A funding in December 2020 from Sequoia Capital and India Quotient for expanding product development and customer acquisition.
Today PagarBook offers comprehensive features specifically designed to streamline operations for SMEs in India employing blue and grey-collar workers. Currently available in 13 Indian languages, it simplifies staff salary payments, task management, and attendance tracking. PagarBook Lens, its facial recognition app for attendance capturing, was launched in February 2022 and is already conducting 500,000 face scans per day. Through its paid product, PagarBook has doubled its revenue run rate in the past 6 months. As of May 23, PagarBook effectively manages over 1 million employees through its paid platform, serving over 30k SMEs with average employee size of 25.
PagarBook strives to build “The Human Capital Platform for Indian SMEs” and aims to scale its workforce management solution to 10 million SME employees getting managed on the platform every month.
The journey of Rupesh, Adarsh, and Arya from GyanApp to PagarBook exemplifies the challenges of pivoting and the importance of perseverance in entrepreneurship. Despite initial setbacks, they demonstrated resilience and stayed focused on creating a seamless product that addresses a huge pain point for small business owners in India. We wish them continued success in their future endeavors!
Starting with PagarBook’s story, IndiaQuotient is thrilled to unveil its latest series on entrepreneurial pivots, where we will delve into the fascinating world of transformative entrepreneurial journeys. Stay tuned!
