An MBA graduate from IIM, Srinivasu had spent a decade working at ITC, before joining the consulting firm Arthur Anderson in 1999. It was here that he met his eventual co-founders Ajay Kaushal and Karthik Ganapathy. The three of them were involved in consulting in the financial services sector. This was around the time when banking in India was about to undergo a major paradigm shift. Banks were investing in core banking platforms and moving away from brick-and-mortar branches. Srinivasu and his colleagues realised the business opportunity in building a layer of services to assist banks in going digital. They decided not to get into online share trading (or) lending, because of the intense competition.
They felt that payments was the one area where they could be partners to banks. Thus, BillDesk was formed. Initially, they started by connecting banks with any merchants or utilities who had to accept payments from customers. This model was highly beneficial to BillDesk, since it involved no end-consumer acquisition for them. The company would only take a cut from one of the transacting parties for every transaction it facilitates. This digital solution was a win-win for all. For end-consumers, there was convenience; for merchants, there was efficient payment collection at low costs; and banks could reduce the footprint of customers at their branches. BillDesk had successfully tapped a niche market as neither banks nor billers had devised any form of electronic bill payments. BillDesk signed up banks and merchants onto its platform and integrated the technology.
Slow but Steady Growth
The initial years went spent building demo solutions for showing how it all worked, to convince banks and merchants to try it out. It took the three entrepreneurs 4 years of constant persistence before BSNL agreed to sign on in early 2006. Soon, they raised seed funding of $500K from SIDBI Venture Capital. Banks and merchants started seeing the light and signed up by the thousands, as India became more and more comfortable with online payments.