On an afternoon while nearly the complete country is off celebrating, in a room smaller than 10 ft by means of 10 ft, inside the 2nd basement of an business constructing in Vile Parle, Mumbai, CitrusPay founder Jitendra Gupta, alongside together with his 10 member team sat transfixed, looking forward to their first patron to head live at the platform. The client became an ecommerce internet site known as Skoolshop.Com, based by an ex-ICICI Ventures pal of Jitendra’s.
Jitendra had convinced him to try CitrusPay, the web charge gateway he had launched a few months back (April 2011) after quitting his comfortable activity at ICICI. That night time changed into a large night for them as his buddy’s web site might move stay and sooner or later, the primary transaction might hit CitrusPay’s gadget. It might be a litmus test of the ultimate seven-eight months of difficult paintings and of Jitendra’s conviction in his idea.
Diwali celebrations would ought to wait.
The crew waited patiently for Skoolshop.Com to move stay. It changed into a three-hour wait before the primary attempt materialised. A transaction hit the platform, however it failed.
“You recognize, the standard stuff that takes place in payments,” quips Jitendra, of that second.
So the team waited, for another couple of hours before they saw a a hit transaction at the screen. And that single a hit transaction changed the whole lot.
Says Jitendra, “I nonetheless remember that day – it changed our questioning, our lifestyles, our targets absolutely.”
Of direction, even Jitendra, did not know at that time that 5 years later, apparently, simply in time for the competition of Diwali, their lives could absolutely trade once more with the $a hundred thirty Mn bonanza their rival PayU Global, the virtual payments company owned by means of South Africa’s Naspers Group, might dish for a buyout.
A buyout in order to make it with the aid of some distance the biggest M&A coins deal in Indian fintech area.
But then, this result is in reality quite in sync with Jitendra’s huge pursuits who, from the very beginning, had usually aspired of making Citrus the biggest fintech player within the united states.
There Was A Strong Need To Create A Consumer Brand For Payments In India, Which Was Non-existent in 2010-2011.
Before beginning Citrus, Jitendra was operating with ICICI financial institution. He had worked on the bank for almost eight years, along with his remaining challenge being riding the bills approach for the bank, each online and offline.
In the very first level of the challenge, he become instrumental in executing a joint venture, an enjoy which was a big getting to know and opened up a whole new area for him in phrases of thinking. Says Jitendra, “I realised that there may be a big difference among what traders were waiting for and what banks have been supplying in relation to bills popularity, checkout ease, etc. This is where I checked out the global player PayPal, which was my ideal function version again then. PayPal became known for its advanced consumer checkout revel in, and was seemed upon as a dependable charge option in the US and Europe markets. It’s then I felt that there was a sturdy need to create a patron brand for payments in India which became not existent in 2010-2011.”
This realisation, coupled with the boredom that had set in after living the “company life” for 8 years, drove him to quit the financial institution. This become observed by using an eight-month ruin, where Jitendra reflected what he should do subsequent. Not exceedingly, he realised that bills had been what excited him the maximum.
And, as a consequence, CitrusPay changed into launched in 2011. The concept become easy – to resolve merchant reputation issues like quicker on boarding, and imparting dependable infrastructure and analytics offerings. On the patron facet, it aimed to offer a faster revel in of payments on-line as well as a unified checkout revel in on the strains of PayPal as Jitendra became heavily motivated by means of PayPal.
It Can Only Go One Way - Which Is Northwards, It Cannot Go Southwards, And It Cannot Go Flat.
Despite Jitendra’s sound experienced and grand aims, the feedback he received turned into hardly ever magnanimous. Something that have become a venture, and raised quite some doubts in him. Says Jitendra,
The most tough part turned into the comments I got from my peers, friends, and enterprise guys, who believed that in view that payments is a commodity business that's especially dominated by banks, there's no scope for new players. So why am I moving into it?
Though doubted with the aid of many, Jitendra stuck to his conviction. And there has been a logical motive in the back of it. He explains, “My thesis was easy. When I observe the digital transaction marketplace, the opportunity is so large. In 2011, Internet penetration become low, the price volume turned into very low as became the overall virtual transaction space, so I reflected that it may simplest move one way – which is northwards, it cannot pass southwards, and it can not pass flat. So I stated the matters of truth are so fantastic (sic), and it made feel and that turned into my argument.”
Of path, in hindsight, it all worked out.
But again then, maintaining his own conviction regardless of the no longer-so-encouraging remarks, turned into the primary challenge he needed to face if you want to keep going.
Then again, building the platform turned into every other ball recreation altogether. Being a commerce man, Jitendra had no concept approximately technology and it changed into his blind spot. So initially he worked with a with a third party seller who had some revel in on the payments aspect. The vendor helped him build the initial platform, which survived for nearly a yr. But in the six-seven months after setting out, he realised that this would not suffice.
He explains, “In this form of enterprise, if you have excessive goals, you need to grow quicker, you want to be extra agile to your improvement techniques. We had this realisation six-seven months after setting out. So then we started constructing our own in-residence team. So we employed a expert CTO, we employed teams beneath him, and this is how we started out constructing the website online.”
I Made Almost 60 Visits To Airtel Office, Literally 60 Visits.
Citrus went from the first purchaser to 50 clients within two months. Jitendra in my opinion used to drive product and income, work with the technology crew, accumulate companies, or even did office boy chores! Hard pressed for time, he could grow to be working 15-16 hours a day. By May 2012, the startup had started gaining momentum, doing a monthly volume of $150K (INR1 Cr) in keeping with month. This quantity now stands at $165Mn (INR1,a hundred Cr) per month.
Meanwhile, through September 2012, the monthly transaction extent had hit $601K (INR4 Cr). But it changed into no longer sufficient because regardless of those numbers, the corporation’s revenues could quantity to somewhere round $7.5K (INR5 Lakhs). This made him wonder if the version was scalable, what changed into going proper and what were they lacking. Despite all the difficult work, doubts still arose in Jitendra’s head whether, in truth, the enterprise itself became sustainable.
But he decided to keep on attempting and not surrender. He says, “We were getting reasonable achievement however the scale nevertheless eluded us. The matters that I have been warned of in the starting with the aid of enterprise players, that there’s no area for brand new gamers in this sector, kept crossing my mind. So I puzzled if they had been proper or changed into I insane! So these thoughts had been going on continually in my mind.”
But by using December 2012, the startup hit a first rate income run charge. All because of two predominant clients who grew to become matters round for Citrus that 12 months.
The first one become ticketnew.Com that is the Bookmyshow equal for single display screen theatres within the South. Citrus was capable of get ticketnow.Com on-board in July 2012 and it remains considered one of their largest clients nowadays, as well.
Coming On Fast Track
And then in November 2012, Redbus came about. After that Citrus in no way looked lower back!
But landing those debts turned into not anything brief of a check of perseverance for Jitendra. It took greater than 20-25 conferences to convince them and to get them confident about the platform – will deliver higher offerings than existing gamers which includes CCAvenue, Atom Technologies, Timesofmoney, amongst others.
Jitendra would in my view pass for all these meetings. He recounts, “It became general income perseverance which prevailed over sanity. They were using the same old competition. Each time we went with a one of a kind function hoping it would excite them, a better searching checkout page, extra guarantees, showed them more love, and this kind of labored in our favour.”
But, it became in 2013 that Citrus literally hit the jackpot. Because that turned into the year in which it acquired its first high-quality-massive consumer – Airtel!
Airtel came on board in July 2013 and that become a recreation-converting moment for Citrus, because it completely changed their outlook in the direction of scale. Airtel, as a patron, changed into doing 50-60K transactions a day at that point, even as Citrus became nevertheless doing most effective four-5K transactions. So abruptly their scale went up 10 times, the entirety they needed to consider, elevated with the aid of 10 instances. Hence, they needed to construct teams consequently and figure out the service shipping.
But from that day on, Citrus by no means confronted any troubles of scale.
Recounts Jitendra, “I made nearly 60 visits to the Airtel workplace, actually 60 visits, to convince them about our era; giving them self belief approximately our transaction processing capacity; giving them self belief approximately our crew ability set. Around 60 visits to convince nearly each tech man of Airtel, each product guy of Airtel, each enterprise or customer service man of Airtel. So, again it become a massive perseverance job.”
But, of path, this perseverance paid them lower back manifold. Once a massive client such as Airtel become on board, other big clients kept flowing in.
In tandem with the consumer list, the Citrus team additionally improved with time. From April 2011 till December 2012, it had 20 people; in 2013 the number went as much as forty; in 2014 it reached 60; in 2015 it swelled to two hundred; and in the cutting-edge yr, it now stands at three hundred.
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The reason become simple. The groups had been grown aggressively in 2015-sixteen consciously so that they could manage 10X the present day commercial enterprise. Jitendra adds that one big realisation in the growth section become that they had been constantly constructing teams to satisfy the requirement for that time. But in 2015, they realised that they needed to build teams for what became coming years later.
Of path, this adventure of highs become marked with quite some lows as well. Every time the group misplaced a sale in spite of all efforts became a low factor. And one such blow became dropping the Uber’s India account. Says Jitendra,
When you're in a journey in which you need to win and win badly, every time you lose is a low point. We had our truthful proportion of low factors in which we couldn't win few accounts which we wanted. One of them changed into Uber. In 2015, we have been pitching for enterprise for Uber, and we couldn't benefit that account. That could have been a game converting account for us, and that became a actual loss for us. I nevertheless sense regret for it.
But then there were different wins that made up for it.
In The Payment Space, There Are So Many Things Happening Around You That It’s Very Easy To Get Distracted.
As the charge space developed over time, CitrusPay saved its recognition at the route of improving checkout enjoy, of improving merchant offerings, with out bothering a good deal approximately what’s taking place round them or which startup is doing what to disturb the atmosphere.
Says Jitendra, “One of our learnings inside the price area, is that there are such a lot of matters occurring around you that it’s very easy to get distracted. We genuinely saved our awareness and did now not get distracted. We, of route, stored an eye if something recreation converting is happening which could create a danger to our business. And I don’t think anything of that sort was going on among our competitors.”
It is that this consciousness that delivered Sequoia as an investor board early on in their adventure in August 2011. Jitendra was introduced to Sequoia by means of a commonplace friend and as Sequoia loves all matters payments, they invested $1.Eight Mn in their first mission round.
Says Jitendra, “The funding got here at a time when I had no workplace, no technology, no group member and I become working from home.”
Of course, thereafter, more finances came in with a $5.Five Mn Series B investment in 2013, and a $25 Mn Series C in 2015, which saw Sequoia being joined by means of a new investor Ascent Capital, with participation from existing buyers — eContext Asia and Beenos Asia.
The startup now approaches more than $2.3 Bn quantity of well worth yearly, has approximately 20 Mn customers, and 11,000 merchants on-board. From airways together with GoAir, Indigo, Jet Airways, Etihad, Emirates to etailers like Shopclues, Myntra, Amazon, Pepperfry, Zivame, the listing of traders has grown gradually.
Launching Citrus Cube, Sellfie And More
Along with this growth, additionally rose the query of whether transferring the focus to purchaser bills enterprise made feel. In this route, in February 2015, it released an intuitive and consumer-centric cell app ‘Citrus Cube’ which we could the user control and plan private fee and payments even while running offline. But the crew realised that merchant bills have been its strong point and therefore in December 2015, the customer commercial enterprise became spun off as a separate entity, with co-founder, Satyen Kothari, leaving to head the new startup.
Explains Jitendra, “Cube’s business model became very different from Citrus’ objective. Our commercial enterprise model changed into to emerge as the largest price organization in India and the Cube business version become extra customer focussed and private economic management. These were now not aligned at all. The burn rate there has been very high, which we had been now not secure with, thinking about the plans for the price business. So that is where we took a conscious call. Fortunately, each person understood the motive which include Satyen who parted methods with us. So it labored out quite nicely for us.”
It is the identical conscious desire which Citrus has made whilst it chose to consciousness greater on the entire payment device instead of wallets on my own. Jitendra explains, “It’s a public belief that people are the usage of wallets as mainstream. We do accept all wallets, if you study the pockets percentage within the whole charge ecosystem, they're around 1%. So do you consciousness on the 1% market or on the one hundred% marketplace opportunity? That become a desire we needed to make final 12 months.
“So we made the choice the alternative way – we are able to consciousness on one hundred% of the market and we can deliver an choice to the customer to pick out which charge alternative they need to use rather than influencing their desire.”
In the same spirit, increasing its reach towards contextual trade and social payments, it launched the contextual trade platform, Sellfie this June. Sellfie will enable people and small companies to sell and collect bills on social networks and immediately messengers the usage of buy buttons, charge hyperlinks and chat bots. Interestingly, Sellfie has been independently developed by using Anish Achuthan, co-founder of Zwitch, the Bangalore-based fee platform it received closing 12 months for an undisclosed amount. With Zwitch’s acquisition, team turned into what Citrus was surely gunning for.
Says Jitendra, “Zwitch turned into an acqui-lease and the simplest purpose in the back of it become the crew. We did not get any commercial enterprise, we did no longer get any generation, we simply wanted to get the crew in-house because we really like the crew, particularly Anish who changed into heading the group.”
It may be adequately concluded that with the release of Sellfie, that too with none steerage from their side, Jitendra and Amrish Rau’s (MD CitrusPay) guess on Zwitch appears to be paying off.
From Day One, Clearly Our Intention Was Right - If The Company Succeeds, Everyone Should Celebrate The Success.
After elevating its Series C closing 12 months, CitrusPay had massive plans this yr to launch its credit score product Lazypay and Sellfie and push them out in the marketplace. So with the intention to gasoline themselves a lot earlier, they went out inside the marketplace for budget and commenced meeting financial traders nearly six months earlier than.
The responses they were given were encouraging. And one of the respondents befell to be PayU Global, the virtual bills company owned by means of South Africa’s Naspers Group. PayU India become a strong competitor to Citrus in India. So of route, once they evinced interest, the Citrus group became a bit involved.
“It came about by using danger,” says Jitendra, on the merger.
Says Jitendra, “Of course once they met us the primary time, we puzzled why those men are assembly us. We had been involved whether or not the objective turned into to take statistics from us about our commercial enterprise.”
But Jitendra’s doubts had been relieved by using PayU Global’s management group which gave the Citrus crew big comfort about their vision and long-time period plans. While discussions started out on an investment notice, the greater the 2 groups mentioned and engaged, they located a stark similarity of their vision approximately constructing the most important fintech agency in India.
Explains Jitendra, “Both the groups had been so passionate about doing it, that we questioned why sub-optimise the outcome? Why no longer get collectively and do a larger issue, at a larger platform, at a bigger scale with a extra razor-sharp recognition? So that we don’t deliver a chance to everyone to come and compete with us. And I need to give full credit score to the Naspers group of assuring us of ways they have been wondering thru the combined entity. They did their process so professionally that we by no means felt any pain after the first couple of meetings.”
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But of route, proper to their nature, it took more than 100 meetings for the CitrusPay group to ultimately decide in favour of the merger!
Says Jitendra, “It took around 6 months. Before Naspers, we were given a couple of economic investment time period sheets as nicely. And those had been similarly or greater attractive, I might say. But we got aligned with the Naspers team due to their imaginative and prescient and due to the long-time period wondering they have with appreciate to the Indian market.”
The relaxation, as they say, is records. And considered one of the largest mergers in India’s fintech area followed, with approximately 50 employees set to proportion in the achievement with an envisioned INR forty three Cr. Being allocated as returns at the worker stock option plan (ESOP), and Sequoia Capital predicted to earn a 4-fold go back on its funding. Other traders like Ascent Capital, Japan’s Beenos and eContext Asia have also earned bountiful returns, thus setting the transaction in the limelight as a a hit exit.
But Jitendra begs to differ. He says, “Though the media is highlighting it as an exit, personally I am no longer seeing this as an exit. I am seeing this as a partnership with Naspers to construct a organisation for future and build the biggest fintech agency in India.”
Be it an go out or a partnership, one aspect is for sure – the founders’ intention of making the organisation’s fulfillment each person’s achievement has been handsomely tested. About 15 personnel are set to rake in over $150K(INR 1 Cr), with an office boy who become one of the first employees at the corporation taking home $75K(INR 50 Lakhs)! And Jitendra is one happy founder for the time being.
He says, “From day one, absolutely our intention changed into proper. Our aim turned into if the business enterprise succeeds, every person need to enjoy, anyone must rejoice the fulfillment. So we have been very generous in giving stock options to those who joined early, at the identical time we made the stock alternative provide wider so that increasingly more human beings gain out of the rewards which the agency gets while it succeeds.”
The startup has had a steady ESOPs coverage because the start – human beings who have joined at a senior leadership stage or have spent a 12 months in the company, are entitled to inventory options. Of path, no person ever predicted that the spoils might be so huge!
He adds, “So simply we did not expect inside the begin that the reward size might be so huge for the employees nor did they, however it’s their effort which were given the enterprise to this stage, so I think they deserved it, they earned it for themselves. I don’t suppose we did any favour to them.”
And sure they have got. So an awful lot so the founders bountifully arranged a party for all the 290 employees at Phuket, even tweeting to Sushma Swaraj for assisting out to expedite the passport procedure for some employees going on their first worldwide journey!
And when requested how Sequoia who've made a handsome go out too, reacted, to the purchase, Jitendra admits, “They have been now not satisfied and in case you ask them nowadays they may be still not satisfied. They sense that bills is the following massive opportunity in India. They take large bets on payments and have invested in successful payments corporations (PayPal, Klarna, Alipay). But when we shared our vision that how it requires more and more capital which Naspers can assist and how Naspers shares the same imaginative and prescient, they agreed.”
He adds that he offers credit to Sequoia that they go by using what founders are in reality satisfied of, rather than entering into conflicting conditions. And that is in which they gave their massive aid to the Citrus crew which become quite satisfied by means of Naspers’ vision and their capability to take Citrus to the next level.
So, ultimately Sequoia respected that selection. A choice as a way to hopefully make Citrus the largest enterprise within the online payments area. And Jitendra is assured that it’s a given, there are no two methods about it.
He says, “We certainly have become the most important by using combining both the organizations. Our cognizance is to create the largest fintech organisation through our play in credit score, through our play in P2P payments, through our play in SMB credit, and POS devices. We are going to have a larger play within the financial surroundings now.”
So even as Amrish turns into the CEO of PayU in India and could lead the entrepreneurial management crew throughout PayU and Citrus Pay, Jitendra will drive PayU’s fintech foray into credit via Citrus Pay’s supplying Lazypay. This product essentially separates out the purchase and the price experience. One can actually underwrite the purchase by means of giving credit to the patron and dispose of the anxiety of charge drop, that's a huge subject with cellular bills.
So correctly, users can save on cell with out paying and the platform could aggregate their purchases for a fortnight. One can then pay in a unmarried pass every time one is attached with WiFi or via your computing device or at home, without having the anxiety of no longer completing price.
He in addition provides, “I experience post-acquisition, our plans are going to get multiplied. The cause I experience this is, now we have the power of agencies. Earlier 50% of my time together with Amrish, turned into spent in fundraising. Now we are able to make investments that point returned into the business. So genuinely, while we were making an investment greater time in our enterprise, our chances of fulfillment are more.”
The Line Will Get Blurred Between Whether We Are A Consumer-centric Company Or A Merchant-centric Company.
While the transition plan post the merger remains a piece-in-progress, how Jitendra sees it going forward is that it's miles going to get the pleasant of each structures – excellent of the features, functionalities, and what traders like. Though he did say it’s too early to comment if it is going to be one combined platform, one element he turned into sure of turned into that the purchase does not affect the crew as every group member has a enormous role to play inside the combined shape.
In the subsequent five years, traders will nonetheless be the primary priority for the mixed entity, and their most important revenue source. But clients may even become an crucial element. Says Jitendra, “Ultimately, clients are those who've to accept your providing, must like your experience, should use you more frequently, or avail credit for a transaction. As I see it, going ahead, the line gets blurred among whether we are a purchaser-centric agency only or a service provider-centric enterprise.”
And there aren't any doubts approximately it, given the reality that during bills scale might be the massive factor.
But he provides that in payments, going forward, payments play really gained’t be payments play but data play. Payment transactions give one a whole lot of information and how startups leverage the information to improve the client checkout revel in; to allow payments on social channels; to provide SMB credit; those are the sport-converting possibilities within the ecosystem.
Meanwhile, the upcoming payments banks may also do their bit in including to this scale. As according to Jitendra, consistent with the RBI’s goal, the bills banks will growth financial inclusion, focussing on the unbanked populace that's every other four hundred Mn – 500 Mn. And once this segment receives formal get admission to to banking channels and gets used to it, they're going to get pushed closer to the revel in which urban clients are used to, that is wherein CitrusPay and other bills players come into the photo.
However, for all of India to head cashless, he estimates it’s nonetheless going to another 20 years or so. He does upload, “But five years down the line, 20% of the transactions is probably cashless, there’s a sturdy possibility of that. So these days if simplest three% transactions are cashless which means today’s marketplace elevated via six-seven instances can be the possibility 5 years later. So, clearly, it’s a huge market we're gambling in.”
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For Jitendra, this is simply some other validation of the perception he had six years before whilst he had cease his banking process to start his entrepreneurial adventure. While he gives credit score to ICICI’s entrepreneurial lifestyle for his success, as for right from the start he become given complete authority to take calls on large topics, but on the equal time, eight years at the bank, and he knew he turned into getting too cozy.
He adds, “Clearly that enjoy turned into one of the huge input variables. And the second one become my DNA. I am Marwari via the community. So of path, as a Marwari, you usually have an aspiration to start your personal enterprise. So, literally, I need to have thought of fifty-ordinary thoughts in view that 2006 before hinging on to Citrus, but the courage to go away ICICI was spur of the moment. It turned into no longer planned. I changed into 29 and I did not want to be so secure in my life. This turned into the time when I desired to paintings more difficult and I don’t assume I became geared up to do this in the financial institution once you have too comfy. So I thought let me simply begin. And one nice day I came home and said I am quitting.”
Fast ahead six years and a $a hundred thirty Mn acquisition tag, and Jitendra may nearly look relaxed with in which he has taken CitrusPay to. But the vision to end up the most important fintech player in India may not let that consolation closing for lengthy. It is simply the form of gasoline his stressed but persistent entrepreneurial spirit seeks after CitrusPay’s current achievement.
Another 20% of transactions will go online within the next 5 years and about 500 Mn people gets get entry to to banking and payments in the near future. It received’t be incorrect to say that the sport has simply started and Jitendra won't discover an awful lot time to be relaxed, in the end.