Enabling Reconciliation of Digital Transactions

Prime Ventures Partners funded Recko, an AI-Fintech Startup, plans to expand into international markets in the next 6 months and grow at 10x in the next 12 months

Saurya Prakash Sinha’s experience of running companies in the past taught him one thing – scaling up operations was a challenge especially when it came to keeping track of financial transactions. “The way companies were constructed was complex and the finance team had a tough time finding out details about the receivables and pay outs,” recollects Sinha. He explains taking an example from transactions that take place in an online shopping site. “You add all products and check out. When you check out, you can use all instruments to make payment like gift card, wallet balance and can initiate a transaction for the remaining amount. As far as the company goes, the finance person has to trace all the instrument and account for it and also look at refunds and exchange. This is unusual level of complexity,” says he. This is where Recko steps in.

Incorporated by Sinha and Prashant Borde in 2017, it is a fintech startup that enables  AI-powered reconciliation of digital transactions. It has built a SaaS-based reconciliation product that keeps track of the complete transaction lifecycle and commercial contracts for organizations. It automates reconciliation and allows the data to be traced throughout the entire transaction cycle. It does this by getting connected to payment gateways, banks and merchant’s order management system through APIs and helps the merchant in tracking receivables and identifying settlement discrepancies. Its solution is suited for companies with high volumes of transactions such as e-commerce sites, insurance providers and banks. In fact, it has recently started working with various Banks, NBFCs and Insurance companies and is currently running successful pilots with them.

Early days
During the first eight months, the team spent a lot of time building the product as it wanted the quality to be good and able to handle volume. It then reached out to customers. “We subsequently spent one more year in refining the product. From December 2018, we have onboarded clients more aggressively and now have clients in double digits,” says Sinha.

The company recently raised capital from reputed global and Indian fintech angel investors. Its investors have worked extensively in the payments and fintech sector, having built successful companies and world class products. The follow-on funding round also saw participation from the company’s existing investor Prime Venture Partners. Recko had earlier raised US $1 million seed funding from Prime. Recko has a run rate of reconciling a quarter billion transactions annually. It has reconciled transactions worth US $2 billion in the first 12 months of operations. Their clientele includes companies such as Grofers and Meesho. 

After raising their seed fund, the company will now focus on expanding its team, scaling operations and launch into unexplored sectors. “We have a team that is capable of ensuring that we are accurate when we scale and have invested in technology scaling,” says Sinha. He The company decided to fix the product further and made sure that it was close to customers and build something that’s relevant to them.

Sanjay Swamy, managing partner, Prime Venture Partners
Recko is successfully solving exponentially a very complex problem that most companies are facing with digital transactions because of the volume and complexity. We are rapidly seeing newer and newer use cases for Recko, around the world. We are thrilled to welcome marquee co-investors and have the opportunity to contribute further to Recko’s journey in a significant way.

Power of integration
It enables finance teams to enrich multiple data sources and reconcile millions of transactions in hours, instead of days, without writing a code. This results in reduction in manpower by 50 per cent to 80 per cent and keeps an impeccable watch over the transactions to ensure money moves between the right parties, at the right time with correct deductions. Recko is now crunching massive volumes of transactional data to digitise organizational financial control and is building Machine Learning models to identify anomalies, risk and intelligence around money flow.
Large companies have built such technology when the storage was costly. Now the cost of storage has come down and processing time is now available. “This is our differentiation,” says Sinha. “In certain places, it is a buy vs build decision,” he continues.

Where to from here
According to Recko, Digital payments in India are expected to more than double to US $135.2 billion in 2023 from US $64.8 billion this year. RBI statistics suggest that the volume of digital payments is expected to hit 30 billion in 2019. And there is a dire need for an independent third party transaction reconciliation layer to ensure timely settlements among various interacting parties. The reconciliation layer will ensure that the businesses are receiving settlements in accordance with the agreed rate cards, payout cycles, and are able to track and report payment realization, refunds and chargebacks.

“As there is increase in use cases, more layers get created. It is becoming more complex as companies start integrating things. As companies get creative on the consumer side, more work gets added for the finance team,” adds he. This also means that Recko needs to ensure accuracy especially as its dealing with financial data. “This product takes time to set up. One needs to integrate it with their system,” says Sinha
Going forward, recko has set itself aggressive expansion targets and plans to enter international markets including the U.S, in the next six months. “We have enquiries from international market. We are working on distributing this product digitally,” says Sinha on a concluding note.

Snapshot:Recko
Founders: Saurya Prakash Sinha and Prashant Borde
Year: 2017
City: Bengaluru
Funding: Marquee investors include Taavet Hinirikus (Co-founder of Transferwise), Ashish Gupta (Managing Director, Helion Ventures), Vaibhav Puranik (Financial Product head for Carta), Shamir Karkal, (Founder of Sila Money), Eric Kwan (Early Facebook engineer and Founding engineer of Operator) and Locus Ventures. The follow-on funding round also saw participation from the company’s existing investor Prime Venture Partners
Brief: It is a fintech startup that enables AI-powered reconciliation of digital transactions. It has built a SaaS-based reconciliation product that keeps track of the complete transaction lifecycle and commercial contracts for organizations. It automates reconciliation and allows the data to be traced throughout the entire transaction cycle. Its solution is suitable for any company with high volumes of transactions such as e-commerce sites, insurance providers and banks.

Poornima Kavlekar has been associated with The Smart CEO since the time of launch and is the Consulting Editor of the magazine. She has been writing for almost 20 years on a cross section of topics including stocks and personal finance and now, on entrepreneurship and growth enterprises. She is a trained Yoga Teacher, an avid endurance Cyclist and a Veena player.

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