Happay about it!

Fintech & Financial Services


When IIT Kharagpur alumnus Anshul Rai and Varun Rathi first conceptualised Happay and setup the company in 2012, it was a customer product that was targeted at students and young professionals to solve their peer-to-peer payment issues. “They face problems when they go out with friends, especially when it comes to splitting the bill. Eventually, a NEFT transfer takes place. We soon realised that there was no clear solution for this. That’s when our first product was conceptualised,” recalls Rathi. The company’s product allowed its users to select a friend from a contact list and make the payment without any bank account details. This being a payment product, it took the company almost six months to understand the regulatory aspects and after almost a year, it launched its first product.

However, what they found was that as it was a very consumer driven product, the initial cost of acquisition and retention were high. “The revenue was not very sizeable, even if we could scale it hundred times,” says Rai. He adds, “There were a few reasons for the same. We were not deeply integrated with the bank and did not have much flexibility and couldn’t do much innovation on the product.”

Eventually, the founding duo realised that they had to think big and changed their business model. They observed that while consumers have a lot of freedom and flexibility when they pay for things, it was not the case with businesses. The way businesses pay for and manage their expenses has remained the same for decades. “This mismatch led us to create a new vision for Happay, which is to help businesses make their payments and develop a new product to support this vision,” states Rathi.

The business model transformation

“Our current product is completely different.  While we were creating the consumer product, interestingly, we received a lot of requests from businesses,” shares Rathi. Though the company was not targeting businesses when it set up shop, the businesses approached Happay to use its platform in some way so that they could facilitate their inter-organisational payments and transfers. “The product we had initially introduced could not cater to businesses,” says Rai. That’s when the team started talking to corporates to understand the reasons for looking at Happay’s product. “We realised that they only hold current accounts with the bank for this purpose and operationally each business is different,” he says. Corporates need to facilitate internal settlements or payments and be more integrated to their system, which was not happening through banks.

If one were to examine the facts, in the past decade or so, all innovation with respect to payments has been happening in the consumer space. For businesses it has always been current accounts and banks. “There is no integration into their supply chain or CRM. This looked like a big gap in the market,” says the co-founder.

Keeping this in mind, in February this year, the company launched Happay Business Expense VISA Card in partnership with Ratnakar Bank, a B2B product. Happay cards are most frequently used for travel and expenses, office administration, procurement and petty cash and employee/partner disbursements. Today, its product is an end-to-end business expense management product linked to a Visa card. It is integrated with mobile and web dashboards and automatically records and verifies the data and can be directly imported into the accounting division.

One can load, withdraw money or set limits on the card. “The company has the flexibility to apply all kinds of rules on the card itself. It is easier for them to give the card to all employees and set policies on the card,” explains Rathi. It is even easier now as there is a mobile app which is linked to the card.  All purchases done from this card are auto-captured on the Happay platform. Employees can snap photos of receipts, record cash expenses and submit expense reports. This apart, the company can know how it is spending in real time rather than a delay in visibility of about 30 days to 40 days.

For its services, the company charges a flat fee on the number of cards on a monthly basis.

In just a swipe

“Partnering with Visa Card was not easy. Apart from banks, not many companies have such a partnership. For the kind of product we have built, Visa’s partnership is critical for us and that took a lot of time,” states a proud Rai.  And that was well worth the wait. He shares that from a transaction perspective, the volume has been good, covering spends of about Rs. 20,000 to Rs. 30,000 per card per month.

The company’s target segment so far has mostly been new age companies and SMBs, as there are customised products available for large enterprises. “Companies who have employees ranging from 20 to 500 are looking for a way to automate this process,” opines Rathi. The company is initially targeting Tier-I cities like Mumbai, Hyderabad, New Delhi and Bengaluru and will eventually expand to other cities.  “Our USP is that we give what the banks don’t give the businesses,”” says Rathi.

On the marketing front, Happay is focussed on clinching B2B customers online, without a face-to-face meeting. “Currently we are doing more than 30 per cent closures online,” says Rathi. The company’s focus is on using websites such as LinkedIn and it aims to project itself as a one-payment industry expert. Happay is also utilising emails effectively and is doing focused target marketing. It connects with people offline through events and trade fairs.

On a growth path

Recently, Happay raised US $500,000 from Angel Prime, a seed-stage fund based in Bengaluru. It is planning to use these funds in product development, marketing and to expand its technical and sales team. “Angel prime has helped us understand the domain better and helped in networking,” says Rai about their partnership.

With a strong focus on the Indian market, the company is also planning to expand to other countries, especially the South-East Asian markets, after one year.  Its long-term vision, apart from expense management, is to manage all the business expenses, like non-salary payment, vendor payment and so on for its existing customers. “For some companies, such expenses can go up to 50 per cent or 70 per cent of their overall expenses. Those can be brought on to the Happay platform,” says Rathi. With its unique real time data visibility feature, Happay wants to make a difference in the domestic and global markets over the next few years.



Founder: Varun Rathi and Anshul Rai

Year: 2012

City: Bengaluru

Business Profile:   A business expense management solution company that streamlines expense workflow from end-to-end and gives real-time visibility and control over business spending.

Funding: US $500,000 from Angel Prime, a seed-stage fund

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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