Crossing $1M in ARR in less than 18 months, and finding a robust product-market fit in the fin-tech ecosystem, Aravind Sriraman, Abhishek Rajagopal and Tholkappiyan Velavan are your classic entrepreneurial team—engineering graduates who put in their stints with large corporations, led teams, experimented successfully, and then decided to team up and start their own.
Not in New York or San Francisco. They are based in sleepy, conservative Chennai. In Tamil Nadu.
It wasn’t easy, though. “We began with the idea of analyzing customer financial transactions data to help financial services companies like banks and credit cards know their customers better and create compelling personalized offers. Except we came up against a wall almost instantly—the banks did not have the technology to share the data (with the consent of the customer who wishes to avail these offers) in a way that a fintech company could build over it.,” recalls the more loquacious Aravind Sriraman, who’s last job was at Amazon in the traffic and search verticals.
The lean team was quick to pivot. “We saw an opportunity to create some solutions for businesses to ease their tedious banking experiences, and built some light weight APIs to create a B2B payment stack—initiate fund transfers via IMPS, NEFT, RTGS and UPI to any bank account number or UPI ID and check the status of the fund transfers.”
Following this was a banking stack—creating unique virtual accounts for their customers and instantly receiving transaction alerts when funds are added to the virtual accounts through UPI, NEFT, IMPS, RTGS. The latest is a UPI stack—issuing UPI IDs and QR codes to any merchant for accepting payments through UPI and receiving instant transaction callbacks.
“Essentially, we are helping any company create their own fin-tech arm, and engage with their partners, merchants, and financial services in digital, virtual environments, using our lightweight APIs,” says Abhishek Rajagopal. “Irrespective of their size, they can offer digital payments, collections, and track transactions in real-time.”
So how did they start? What’s been their experience? And if they were to do it all over again, will anything change?
“We are from Chennai, so there was no question of where we would start our company,” recalls the duo. “We could have gone to Bengaluru, but we realize the talent pool—while rich and experienced, would always be looking to jump into the next “cool” venture, while costing us quite a bit more.”
In the short two years, the company has grown double digits, and is proud of their recruiting skills. “People here don’t understand options, venture capital, or open to risks. While it was tough in the beginning, we use the network effect to influence prospects to join us.”
One thing they definitely feel is open mentorship and events and just the “start-up” energy in Bengaluru that is missing in Chennai. “You just need to head to any start up garage, and there is some event happening every evening—you can network, meet prospects and venture folks, and definitely seek talent,” says Rajagopal, who spends much of his time traveling. “Chennai misses all this energy, and more importantly, mentorship. We could have definitely avoided our early mishaps if we had been able to speak with others who have been down this path.”
With most venture funds setting up their offices in Bengaluru or Gurugram, those cities are strongly positioned to spawn more start-ups, reflect the duo. “Not that we feel the distance affects our chances, but we think Chennai should band up to do more in attracting funding. After all, that’s the engine that fuels entrepreneurship, right?” laughs Rajagopal. They are currently in the middle of their fundraising round. They have signed term sheets and are most likely to close early May this year. Hypto is based in Chennai, and offers a proprietary routing algorithm that delivers the highest success rate for instant fund transfers and allows 24/7 instant fund transfers without limits to select beneficiary banks. This algorithm also reduces Hypto’s own cost of fund transfer that is passed on to users, thus providing the cheapest cost of fund transfer in India currently.