It turned into a specially hot day in Delhi, in the course of the summer of 2010. Raja Ram Gupta – a partner at an accounting company – become having a deep conversation with his son, Archit Gupta, who changed into then an engineer at Data Domain inside the US and turned into journeying his parents. The communique become approximately the complexities of the authorities’s these days brought on line tax submitting portal.
Archit discovered that no longer most effective a median taxpayer but also experts like his father struggled to discover their manner around the portal. The issues were deep-rooted, together with Microsoft Excel-based gear, XML formats, and so on, and will absolutely use a solution.
Discovering a lacuna derived business opportunity right here, Gupta’s entrepreneurial spirit kicked in. Within six months, at the July 19, 2011, he launched ClearTax, a fintech startup that gives answers for income tax submitting on-line. He, however, had a mere 11 days earlier than the cut-off date for tax filing ended that yr. With no advertising and marketing budget in his arsenal, Gupta actually relied on emails to buddies and buddies to try out the brand new product.
To his wonder, inside hours of the website going live, ClearTax registered its first person. Eventually, in those eleven days, ClearTax had nearly 1,000 people filing taxes. With this early momentum, the agency checked out corporates, SMEs and chartered accountancy firms for submitting corporate tax returns.
It became at a hackathon that Gupta hosted for fintech large Paytm in September 2011 in which he met Srivatsan Chari and Ankit Solanki. The meeting struck a chord with him and he provided both positions at ClearTax. The group become running genuinely hard and closer to the evolution of ClearTax and their attempt was vindicated in the hastily-burgeoning person base.
Steering Clear Of Taxing Obstacles
After finishing his Btech from IIT Guwahati, Gupta moved to america to pursue his Masters in Computer Science from the University of Wisconsin-Madison. He then went directly to work as an Engineer at Data Domain. Therefore, moving from the world of Computer Science to tax submitting and finance generation became a main shift for Gupta. This, coupled along with his moving to India to start a present day business enterprise in a site he turned into unfamiliar with, become a massive undertaking for him.
“It become a long and lonely adventure before recognition came to ClearTax. I had to live to tell the tale three years with the savings that I had accrued from working in Silicon Valley for three years,” says Gupta.
Although the initial performance of the employer offered the a whole lot-wanted self belief guarantee to the team that they've created something of fee. However, the mission capitalists did now not see price in an Indian product that changed into now not supposed for US customers. An totally special Indian product did not appeal to the undertaking capitalists, Gupta claims.
He spent many sleepless nights and difficult weekends considering upon a way to recognise his long-term imaginative and prescient and dreams for ClearTax without cash. Moreover, the regular reminders from his buddies over at the Silicon Valley concerning the beneficial possibilities available for him if he moved returned to the USA, weren’t supporting his anxiety. “As an entrepreneur, it have become crucial to disregard all of the noise round, particularly while you are not doing properly. I and my family located it tough to make even household keep in mind that I became constructing a commercial enterprise,” states Gupta.
But, there was light at the give up of the tunnel. During the summer time of 2014, the whole lot modified for ClearTax.
The Y Combinator Boost For ClearTax
In 2014, the renowned Silicon Valley-based startup accelerator Y Combinator decided on ClearTax to be a part of its accelerator programme. Since then, there was no looking lower back for the group. Not only have been they the 5th Indian startup to be funded by way of YCombinator, however it changed into additionally the accelerator’s first startup that targeted solely at the Indian market.
The YC backing proved to be a massive boost to ClearTax’s boom trajectory. ClearTax obtained its collection B round of funding of $50 Mn (INR four hundred Cr) from Composite Capital after being within the commercial enterprise for over seven years. The business enterprise has formerly raised a mixture of a little over $15 Mn in a Series A round and angel funding. The investors encompass Y Combinator, SAIF Partners, Founders’ Fund, Sequoia Capital and PayPal co-founder Max Levchin.
Apart from the monetary gains, the entire YC enjoy additionally helped the group garner useful training that helped mould the existing-day ClearTax. “A key principle Y Combinator taught us is to construct some thing that people need. At ClearTax we continually paintings backwards from patron desires. We have a robust purchaser insights team constantly operating to force meaningful insights approximately patron pain factors,” says Gupta.
“Another essential principle taught to us at some stage in YC days become “Launch now”. Sometimes businesses put an excessive amount of effort into finding an appropriate name for the product or ideal way to a problem. YC mentors constantly asked us to recognition on launching an idea in the market. Because the satisfactory manner to analyze is to check the product inside the market,” he adds.
Modus Operandi And Revenue Streams
ClearTax gives software program that enables individuals, groups, establishments, and chartered accountants with their tax-associated and compliance necessities thru various merchandise.
Tax submitting – ClearTax is a product designed for people to put together and report their earnings tax returns in a quick and efficient manner whilst maximizing their tax deductions.
TaxCloud – It is an internet and cellular-based totally ITR and e-TDS Software which allows CA corporations & businesses throughout India manipulate their exercise. The software help CAs test the submitting reputation in their customers whenever and from everywhere. It has capabilities like computerized selection of the proper ITR form. The software program will also import the TDS, TCS, Self-paid tax entries directly from the shape 26 AS, thereby removing any guide records entry. It allows direct e-filing with digital signatures and easy revisions.
ClearTax GST – According to the organization, its ClearTax GST Software is India’s first geared up-to-use GST-compliant billing and submitting solution.
ClearTax Invest – ClearTax Invest gives a mutual fund funding platform for wealth generation and tax saving. Customers can pick from numerous handpicked funding plans together with complete steerage on mutual funds.
CA & felony services – ClearTax chartered accountancy and felony services provide a market platform for economic & compliance services, catering to 300K organizations/people.
According to the organisation, “When the authorities introduced the large indirect tax reform with the introduction of GST, we realised that the organizations have been uncertain of its implications and compliance necessities. We determined to construct a product to simplify GST for groups. The product speedy have become the most important GST solution in India with over 80K businesses adopting it and eight% of India’s GST returns being filed thru it.”
ClearTax provides a entire suite of GST compliance solutions which additionally consists of e-way invoice for motion of products, permitting businesses to generate e-manner bills and goods transporters gain from a reliable mechanism of submitting invoices and calculating tax liabilities. This answer is largely beneficial for huge and mid-sized agencies, with whom ClearTax works on an annual rate version and claims to have a person-retention charge of 90%.
“Other than GST, we also generate sales in our controlled services commercial enterprise in which businesses can connect to CAs for compliance, employer registration, and different offerings for a set price,” states Gupta. However, the corporation declined to comment on its sales projections for FY 2019-20.
Clear The Path, ClearTax Coming Through!
Currently, ClearTax is used by over five Mn Indian taxpayers to e-file their tax returns. As in line with the organisation, this makes ClearTax India’s biggest player within the space. It claims that the ClearTax GST software is used by 6 Lakh groups, 60K CAs and tax professionals, and over one thousand big businesses.
As of March 2019, ClearTax had a total worker strength of over 650. It plans to double its 125+ product and engineering crew within the subsequent twelve months. Last year, ClearTax was known as one of the forty two most progressive Indian startups of 2018 through CFT’s 42Next listing.
Keeping consistent with the ever-increasing telephone and cellular internet penetration in India, the company is operating in the direction of turning into a cell-first organization. In the consumer businesses, It is increasing its make investments product with a mobile extension so as to further facilitate taxpayers with tax submitting, making an investment and different capabilities.
In the B2B space, the company is constructing a new GST product. “Given the brand new GST is suggesting adjustments in which corporations are predicted to stand coins waft demanding situations with ITC (Input Tax Credit) depending on dealer compliance. Our new GST product we could businesses healthy their buy information resultseasily and even follow-up with suppliers to ensure timely compliance,” says Gupta.
Additionally, the enterprise is likewise planning to introduce merchandise for the SME segment.
Standard Deduction Of Competition
According to the facts released on the Income Tax Department’s e-filing website, income tax e-filings in FY 2018-19 dropped by way of more than 6.6 lakh; an extraordinary incidence inside the latest history of tax filings. The wide variety dropped to 6.68 Cr in FY2019, down from 6.74 Cr in FY 2017-18. However, the wide variety of registered e-filing customers has multiplied with the aid of 15% in 12 months — from 7.36 Cr in March 2018 to eight.Forty five Cr in March this year.
The marketplace is also getting an increasing number of saturated with various portals and platforms that facilitate the tax filing method. ClearTax considers the authorities portal as its most powerful competitor with regards to ITR submitting. H&R Block and Webtel are a number of its different giant competitors in the tax filing space. In the GST space, ClearTax competes with Cygnet, Tally, and computax. Its mutual fund platform competes with Paytm Money, ETMONEY, Groww, Zerodha and others.
Gupta, but, remains unfazed by using his competition. He believes ClearTax’s high-quality UI and intuitive software program sets it aside from its competition. “We not only provide offerings however also teach our clients, we employ equipment such AI aided investment planner in order to assist guide them to a fiscally cozy destiny,” says Gupta.
According to him, educating the human beings concerning the importance of tax compliance would help trade the preconceived perception that submitting taxes is a complicated method. “Tax compliance is a first-rate increase component for the economy and a big part of every taxpayer’s life. It shouldn’t need to be dreaded – one desires to know what they're paying and why, and the recourse in case something is going wrong.”