News and Reviews - eServices funding is in news again. Software-as-a-Service (SaaS) is turning a favourite business model to back for investors. The latest such venture to get backing by early stage VCs is Fin-e-ssential Infotech India Ltd, a Mumbai based company that had its origins during the dotcom boom of 1999-2000 as an online tax filing company (www.filemyreturns.com), and now metamorphosed into a payroll and HR process management company based on the principle of SaaS. Fin-e-ssential has received investment (estimated to be under $1 million) from Mumbai Angels and Erasmic Venture Funds, a Bangalore based early stage venture capital firm.
The company was founded by Prasad Rajappan, who got inspired by an unexpected income tax notice he received in 2000. Rajappan had to seek the help of a chartered accountant friend to sort out the IT notice. He smelt an opportunity here as there were millions of people (Indian taxpayer’s last count is 31. 5 million, which is expected to touch 50 million in the next couple of years) who needed some help in filing their returns.
FileMyReturns? is only one of a host of services (under the umbrella brand Cnergyis) provided by Fin-e-ssential. The company now provides a range of payroll, HR, retiral benfits and tax solutions and services to consumers and corporate clients. For instance, it charges Rs 25,000 a month for managing the payroll and HR management of a company which has under 500 employees. The company also offers enterprise solutions such as MyPFManger? a service offered to corporate houses to manage their PF Trust for advisory, operational and fulfillment services. The company has around 32 corporate clients including Reliance ADAG Group, Johnson & Johnson, UTI, HDFC, and so on. The company handles payrolls of more than 1.4 lakh employees, of about Rs 120 crore worth of salaries per month.
“Outsourcing payroll and HR management allows expert to handle that work. There is continual technological innovation in this field which others might not be able to handle,” says Rajappan. “We plan to expand our India operations in next six months and then we will plan to venture into new markets such as Asia-Pacific and US,” says Rajappan. The company plans to have 5 million employee records in the next 3 to 4 years. It also plans to raise another round of funds in the next 5 to 8 months.
For Mumbai Angels, this is the second SaaS company they have backed in the last few months. They had invested $250K along with a few other individual investors in Textual Analytics Solutions, a company that provides text-to-report output to research firms and consultancies on a SaaS model. Mumbai Angels has invested in six companies so far which include Canvera and mKhoj.
Erasmic Ventures has 12 companies in its portfolio, which has companies like Chakpak (movie review), HolidayIQ? (vacation and holiday guide), among others.
http://www.filemyreturns.com/ (FMR) has competition from BuyNowIndia.com (BNI) partner http://www.taxcubeindia.com/. Only time will tell who wins the race. Right now, FMR is a step ahead.
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