Micro, small and medium enterprises (MSME)-tech solutions provider Instamojo last year crossed a million merchants on its platform, and now it wants to grow the number to 10 million in the next three years, says co-founder and chief executive Sampad Swain.

Founded in 2012 by Swain, Akash Gehani, and Aditya Sengupta, the Bengaluru-based company started as a payment solutions provider and has added services like lending and e-commerce over the years. Through its 15-month-old lending service, Instamojo has already created a loan book of ₹200 crore, which it now wants to take to ₹1,000 crore in the next three years as well.

Swain spoke to Fortune India about the company’s growth plans. Edited excerpts:

How has 2019 been for you? What were some of the big developments for your company?

The biggest...some of key product launches. One of the biggest ambitions we have is to create a true blue platform where we are creating products and services for our merchants. We realised very early in our journey that we will get disrupted either way. So, rather than getting disrupted what if we disrupt ourselves. We opened up the platform for third-party companies and developers to create the same solutions they are creating for our merchants and monetise them. So tomorrow if there is a shift in technology, there are lesser chances of us getting disrupted, because the entire ecosystem of developers and startups would have created those solutions already before we create them. We launched something called MDP—Mojo Developers Programme—where any startup and developer, individuals or companies can create solutions for small businesses and then host it on our platform, where merchants can use it. It’s almost like an app store.

Companies are accessing merchant data on our platform with the merchants’ consent and developing solutions; people have created analytics, legal, and CRM solutions. We will be launching a few more this year. This was also the year when we crossed a million users. Most of them are from tier 2 and tier 3 markets.

We cater to solopreneurs, typically people who are sitting at home and creating products and services and selling over the Internet via social media, e-mails, etc.

Are you talking about social commerce?

Social commerce is a part of it, it is a channel. We are selling on YouYube, Instagram, Twitter, etc. But for them, it is just a channel, it’s not the only way they are doing it.

What do you hope to achieve this year?

The year 2020 is going to be much more interesting for us. We accrued a million merchants in the past five-six years. I believe we will cross that milestone in one-year itself. We also have some product launches and we are looking at some acquisitions and investments as well this year.

What are the kind of acquisitions you are looking at? How will these help you grow?

We built the business in bits and pieces: payments, logistics, and e-commerce. In 2019, we stitched them all together. We saw the journey of merchants. Our future acquisitions will be any company that fits into these three buckets: can help my merchant start very simply and very fast; can help them manage efficiently; and can help them grow fast.

We want to build a one-stop-shop for these micro-solopreneurs to taste the Internet. We don’t realise that we have used the Internet as a consumer. We can flip our phone and get an Uber but the same amount of simplicity does not exist for the merchant. In the last 15 years of the Internet revolution, a lot got shifted to the consumers, nothing happened for the merchants. Flipkart happened but it happened for the Xiaomis of the world. We realised that we can build this entire string where these merchants can start, manage, and grow—where they can actually do a lot more by doing a lot less. Technology has to be brought down to the level of consumerism used for business purposes. That’s the key gap we are looking to fill.

Today we are acquiring almost 2,000 merchants a day.

There are a lot of people looking at solutions for merchants and small businesses. What is your value proposition?

If you think of start, manage, and grow—those are compartmentalised by three key solutions: e-commerce, payments, and lending. But thinking from the lens of solopreneurs, it’s not that these tools don’t exist but they are not custom fit for them. For example, there are a thousand payments gateways; some are very good but to use them, you have to build a website first for API (application programming interface) integration, etc. If you go and tell a merchant in Darbhanga this, it is not practical for them. Most players don’t cater to this target audience. When you think of larger players going after the small merchants, you have to think of the base first: What do these people need? How is a Kerala solopreneur different from a Bihar solopreneur? We have data from the past five to six years, we have understood the way to cater to them in the most efficient way.

We have seen a lot of consolidation in e-commerce. Do you believe there is still space for small players like Instamojo?

I believe what Flipkart, Amazon did that was the era 1 [of online retail], of getting 100 million users to come and transact on the Internet and get half a million SMEs on the Internet. What people like us are doing is that we are getting the next 10 million businesses. Potentially some of us will become so big that we will start consolidating. Their DNA is different, of Facebook, Reliance, Amazon, they will potentially try to acquire. Of course, they will start to build their own but it is not easy. The target audience is very varied, segmented, and their expectations are very different. It doesn’t make sense for a large business to do it. Today most of us are figuring this out. We are at a million merchants. In the next three years, the plan is to grow to 10 million merchants. That’s a ginormous base of small merchants.

You have e-commerce, logistics, and lending. Where do you see the next phase of growth coming from?

Lending. We launched our lending initiative about 15 months ago and we have already created a loan book of about ₹200 crore. Unlike term loans and personal loans, our average loan size is about ₹10,000-12,000 given for three days. It is ultra-short-term and bite-size. These sachet loans are a market that banks, non-banking financial companies (NBFCs), or fintechs cannot do because they don’t have the data of merchants which we sit on. While we want to add 10 million merchants in the next three years, at the same time we want to take our loan book to ₹1,000 crore as well.

Our average merchant does the business of about ₹15 lakh in a year. If I give them ₹10 lakh loans, they won’t be able to digest it. Our lending form last year to this year has grown about seven to eight times. I feel it will keep growing in triple-digits in the next few years. After the NBFC crisis, they are left with moneylenders, they don’t have other options.

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