The Founder Background: Winny Patro, Founder of Recordent
Winny Patro belongs to a small town in India (Hyderabad) and graduated from GITAM College with a bachelor’s degree in engineering. Following his study, he founded an NGO that assisted over 100 children in developing life skills, which he considers to be the beginning of social entrepreneurship.
Following his graduation and some work experience, Winny was accepted into one of India’s top business schools, obtaining a master’s degree in marketing, strategy, and entrepreneurship from the India Institute of Management in Calcutta.
He then worked in the privatization of airports and became a part of India’s largest terminal plant GTG. After working at the GTG plant, Winny started two digital companies; one was the aggregation of digital analytics for e-commerce companies and another was building a social networking platform for pre-screen management professionals called IIMnet.
He also got the opportunity to set up an e-commerce platform for some of the largest retailers in India. One of the very interesting opportunities for Winny was to work with the government of India where the chief minister of the state wanted him to sort of build a culture that was very conducive for startups and build policies for startups.
The Core Problem
What problem is Recordent Solving?
Recordent is solving one of the very long-standing problems in India and across the globe especially with businesses that are small and medium enterprises, who are in the trade value chain from a manufacturer to reach into the last detail.
The majority of the business happens on credit and the biggest challenge these businesses face is getting payments on time. So delayed payments have been an issue and we have been solving it. We have 63 million businesses which are small and medium enterprises and imagine 50% of them face the challenges of delayed payments so we think that this problem is so huge.
Why are these geographies underserved by traditional banks and other service providers?
Recordent has observed that some of the models across the globe, especially in the banking sector, show how credit bureaus have been able to solve the problem for banks because banks were also getting late payments.
20 years ago, most of the banks were also getting payments late whereas the credit bureaus had solved the problem and then Recordent thought why don’t they build something very similar or something for businesses so that they can solve the problem for delayed payments so this is a very long-standing problem.
The Target User
Who are the target users of Recordent?
In a country like India, Recordent has 63 million businesses that are small and medium enterprises. If 50% of them face the challenges of delayed payments. So the businesses of such scale and such problems are the target users of Recordent.
What were they doing before Recordent?
The majority of the manufacturers are trying to deal with this problem by sending payment reminders or getting into a sort of very uglier and uncomfortable situation with their customers because they would push the customer to pay on time and send reminders and so on. The business relationships are at stake because of this kind of follow-up and reminders.
“So most of them are going through that route and definitely many of the manufacturers are also taking loans which are obviously adding up to the interest rate which is obviously a cause of concern for their cash flows as well so this is the approach to solve the problem of the late payments. However, with Recordent, I think it’s a very different ballgame now because they’re seeing a complete sort of a paradigm shift and in this way, the problem can be solved.” Winny Patro said.
Can you describe what life looks like after they utilize Recordent?
If you are an accounts manager from any manufacturing company and once you start using Recordent, there are various things that you would get from the platform that would benefit you and your company as well.
The first thing is, it helps you to manage the credit. It will show you a credit exposure to each customer because on a platform when you upload all the information about how many invoices each customer has, the trend on the platform shows how they have been paying in the past so that you know this is how they have been paying in the past which means you know when to expect your next payment as well. So it is giving you sort of predictive analytics on figuring out when the payment is going to come.
The second is based on all the payment history you have as an account manager. Because now, you know how much credit to extend and how many days to credit for extending. So it gives you information to make better decisions or understanding when the cash is going to come in or how much credit you need to provide and so on. so it basically helps for the managing of the credit of the customer and also monitoring of the current customer’s credit.
On top of that, there is the biggest challenge in the country today because different businesses use different accounting software and Recordent is an accounting software agnostic platform with respect to what software your buyer is using. Recordent helps you to check all invoices and invoice reconciliation. A seller uploads all invoices and the customer also gets a dashboard on Recordent to see all invoices. They will be able to match and mix and figure out which invoices are paid, which is not paid, which is partially paid, and so on.
If ozone is an account manager from a manufacturing company, Recordent will help you to manage the entire credit monitoring, grid management, and most importantly the invoice reconciliation for you. On top of all of these, it is going to help you to get the collections because Recordent sends out an automated notification to the buyers and educates the buyer about why paying on time is important and shows the buyer how the track record is looking like and informs the buyer look your track record is going to help you get better business loans in the future and this whole sort of a 360-degree education awareness for the buyer triggers and motivates the buyer to pay on time.
One more thing is if you are in a situation where your customer is defaulted and not responding intentionally (not paying) even on a platform where it’s just to click a button, you just need to select the customer and the invoice and click on send a legal notice. The legal notice will be sent because we work with partners who are aggregated of 20 000 plus lawyers in the country and then we also have something called arbitration. And that’s on a click.
So as an accountant, a right from raising the invoice to giving the credit and managing the credit monitoring the credit getting the payments even if it is delayed and defaulted. You still have options on Recordent to get it done so it’s like a one-stop for them.
Can you explain how they are collecting payments?
There are two ways that happen for payment collections. One is the business that is using a platform, they can integrate their accounting software into Recordent or they can do a periodical bulk upload through excel or they can submit or at an invoice level there are multiple options for them to do so. They can even export their file in their accounting software and import that into a recurrent one.
The second is that a buyer gets an option to make payment online or the buyer makes payment directly also since it is integrated. The buyer can either make it to a platform or the buyer can directly pay the seller. In the first case that a buyer is making to the platform, it automatically gets uploaded if a buyer is making a payment directly to a seller accounting software which is integrated and gets updated and our platform also gets updated since it’s integrated as well.
Innovation & Key Difference
How is Recordent an innovation beyond payment collecting Systems? (UNDERLYING MAGIC – Describe the technology, secret sauce, or magic behind your product?
“I think one of the core aspects of our platform which I think makes us stand out is the fact that we know that we’re going to deal with data and we have to consider the data protection laws that are existing in our own country. At the same time keeping that as a futuristic vision for us to maybe expand outside India.” Winny Patro answered.
“We obviously ensured our entire platform and our entire innovation revolves around data.Our ability to convert the invoice data into a credit report so within a fraction of seconds and invoice information is converted into a credit report format within seconds and makes it available for sellers to make a quick decision on it. ” the founder added.
“So that development of building the automated conversion of the data and at the same time use that data to trigger notifications. So these are two things which Recordent call an engagement platform that we have built through implementing a lot of artificial intelligence tools but I think that our secret sauce is our ability to convert the invoice data into credit reports within a fraction of seconds.”
If you had to describe a second user profile what would it be?
“It fits is in the same geography as India besides this one and a half million, we would want to reach out to everybody else at the bottom of the waterfall as well because those will be our next immediate targets because a majority of the businesses who are the bottom of the waterfall are also on the bottom of the pyramid who wants to grow up the pyramid.” Winny Patro said.
“So they would be our next targeted audience and the fact that about the number that I’m speaking today, we will keep on increasing to go and target the bottom of the government businesses who are also getting into the space of business to business contract transactions so that will be our immediate target.” Winny Patro added.
“Besides that, I would also like to make sure of cooperative society banks. These are very small banks that are in the corners of the country’s small villages. We have about 1.2 million such small banks and they’re called cooperative societies. They don’t fall under the reserve bank or the central bank of India whereas they have a fish space. They also have issues of the late payments as well as not knowing the credit history and those particular segments of 1.2 million cooperative banks are going to be our target as well.“
Funding & GrowthFunding & Growth
How much money has Recordent raised?
“We are making progress. I think we have to let you know around April/May which is going to be about 3 million rounds in the month of April/May and then there are definitely good conversations going on. Besides that, we are also continuing to get interest from investors to be a part of the ongoing uh bridge round. On top of all this, the interesting conversation going on for full-blown acquisition, and then we’re also sort of not closing down on the group. We have put down some proposals on full-time acquisition.”
What do you see as your primary source of growth over the next 12 months?
“The primary source of growth is going to be the seller submitting the invoices on a platform of the buyers and the primary source here. It is going to be going out and collaborating with as many as the industry as associations bodies. That’s how we go out in the market so therefore our primary source of whether it is growth or whether the revenue is going to come from businesses using our platform for managing their credit. We have a sales team.”
“It’s a hybrid sales model about digital and direct sales like I said a majority of the small and medium enterprises in India aren’t yet adopting technology in their businesses. Most of them have been able to adopt technology and the internet in their own lives and their own lifestyle but not in their businesses yet So definitely there has been a little bit of uphill task from our side to go and make them believe and make them convinced and make them understand the power of data, therefore, there is both combination of digital and direct sales.“
Who are your ideal partners?
“We do a lot of partnerships with a lot of institutions that bring us an advantage. These collaborations mostly help us provide an added advantage for our businesses to use the service and sometimes the partnerships help us bring more businesses on the platform“