Recko, a fintech startup that helps companies reconcile digital transactions, has raised $1 million (around Rs 6.93 crore) in a seed round of funding from venture capital firm Prime Venture Partners.
The startup, which operates on a software-as-a-service (SaaS) model and uses artificial intelligence, works with the likes of SoftBank-backed grocery delivery company Grofers and Facebook-backed social commerce platform Meesho.
Founded in 2017 by former PhonePe product manager Saurya Prakash Sinha and Cubeit co-founder and former Reliance Jio executive Prashant Borde, Recko said in a statement that it had processed transactions worth $2 billion over the last 12 months. The Bengaluru-based company has also started running pilots with banks and non-banking financial companies (NBFCs) for its reconciliation solutions.
“Prashant and I saw the limitation of Excels and manual reconciliation processes as we scaled Flipkart, Grofers and Reliance Jio. Hiring more people to ensure a standardised and accurate reconciliation process did not solve the problem. We see the current settlements and reconciliation process as a massive inefficiency in the payment lifecycle across industries such as banking, lending, insurance, telecom, e-commerce etc,” said Sinha, who is also Recko’s CEO.
The company claims to reduce manpower requirements by 50-80%. It connects with payment gateways, banks and merchants’ order management system through an application programming interface (API) and helps them track receivables and identify settlement discrepancies.
“Reconciliation can only be solved by a neutral third-party and has traditionally been handled via a brute force approach of spreadsheets and a battery of analysts. Recko’s tech & AI-driven approach has been very well accepted in the industry,” said Sanjay Swamy, managing partner at Prime Venture Partners.
Deals in the segment
Business-to-business (B2B) fintech companies have attracted considerable investor interest this year, with a focus on micro-lending, payments and neo-banking services.
June 2019: Open Financial technologies raised $ 30 million in Series B round from Tiger Global and Tanglin Venture Partners. The SME-focused company automates accounting, reconciliation and payment functions apart from offering other banking solutions.
April 2019: Digital payments firm BharatPe, which helps kirana stores accept UPI payments from multiple wallets and offers them credit, raised $15.5 million in April from Insight Partners and existing investors Sequoia Capital and Beenext.
June 2019: Online payment gateway Razorpay raised $75 million in its Series C round from Ribbit Capital and Sequoia India.