Watch Full Interaction:- CredFlow’s real-time AI insights, Solving MSME cash flow problems | Kunal Aggarwal | Founder | CEO – YouTube
CredFlow has transformed cash flow operations for small and medium-sized enterprises, providing not only essential financial insights but also real-time payment tracking and customer credit scoring through advanced AI and machine learning. With over 95,000 monthly active users and deep integration with accounting software like Tally and Busy ERP, CredFlow is making cash flow management seamless and accessible. Join us as Kunal shares his motivations, challenges, and the vision driving CredFlow’s growth across India.
In this exclusive interaction with Mr. Kunal Aggarwal, Founder and CEO of CredFlow, we delve into the inspiring journey behind one of India’s leading cash flow management solutions tailored specifically for MSMEs.
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What motivated you to create CredFlow, and how has your journey progressed since its inception?
My background is rooted in the MSME sector; my father and uncles have always been entrepreneurs, so I grew up understanding their challenges. These topics were common at family dinners, which sparked my curiosity about the persistent issues they faced and whether I could address them. I attended IT Delhi, where I engaged in various entrepreneurial activities and launched my first venture, a B2B aggregation platform. CredFlow is my second venture, following my initial project, Rubble, where we provided raw materials like chemicals and APIs to the cosmetic and pharma industries. Through this experience, I identified a significant issue with cash flow management. We often sold on credit, making timely collection from clients a considerable challenge, which ultimately hampered our growth. I realized that our available working capital limited our sales potential. This insight, combined with my experience working with fintech companies to finance purchases, led me to discover that cash flow-based financing solutions were scarce in India. Account receivables posed a challenge not just for us, but for many MSMEs. Thus, I aimed to create a comprehensive cash flow management platform that combines a SaaS solution with financial services like lending and treasury solutions.
Are you utilizing advanced technologies to analyze customer payment behaviors, such as their payment history?
Yes, indeed. As we have grown, we now serve nearly half of India’s GST-registered businesses—around 5 million companies that have transacted with our users. From this data, we have developed our own trade score, which leverages proprietary machine learning and AI models. This trade score functions similarly to credit ratings provided by bureaus for individuals and businesses, assessing repayment behaviors. Through our platform, called Coberex, users can input a GST number to evaluate a business’s repayment history and creditworthiness. This provides specific insights, helping businesses make informed decisions about credit sales.
What challenges did you encounter while building CredFlow, and how did your interest in technology help you address them?
Building CredFlow was challenging, especially as a solo founder just a year out of college. One major hurdle was my lack of technical skills; I needed to find someone capable of developing the product. Additionally, there’s a common misconception that MSMEs are slow to adopt technology. To counter this, we created a minimum viable product (MVP) and tested it with select customers to validate our solution. We needed to determine whether we were providing a “painkiller” rather than just a “vitamin” for businesses. As we expanded, we faced scaling challenges, particularly regarding our data-heavy platform, which has processed over $500 billion in invoices over the past three years. Without a tech founder, we had to build a scalable architecture from the ground up, iterating and overcoming various technical challenges.
How does integrating with accounting software like Tally and Busy ERP enhance the functionality of CredFlow?
Before I answer that, let me clarify our target customer segment. We primarily assist businesses with an annual turnover between ₹2 crores and ₹300 crores—these are established MSMEs that often extend credit to their customers. They encounter significant challenges in tracking who owes them money, the overdue amounts, and following up on payments. By integrating with their existing ERPs, we eliminate the need for businesses to overhaul their accounting systems, which can be a daunting task for accountants familiar with their current software. Our approach from the outset was to augment rather than replace these platforms. This integration allows for seamless data synchronization, enabling users to start utilizing our solutions immediately without any cumbersome migration process.
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Is CredFlow user-friendly compared to other tools, and what specific knowledge is required to use it?
Yes, CredFlow is designed to be a self-service platform. Many users can simply download our app and begin using it without needing any formal training or guidance from us. Overall, it is user-friendly and does not require any technical expertise or specialized knowledge; users can easily view and interpret their data.
What key trends in the SaaS industry do you think will shape the future of cash flow management?
There’s a common saying that “software is eating the world,” which rings true across various industries, including cash flow management. Traditionally, many businesses managed their cash flows using paper or Excel spreadsheets. However, we’re seeing a shift toward automation through software solutions like ours, which streamline cash flow management. As technology advances, insights provided by these tools will transition from algorithm-driven to machine learning and AI-driven models. This shift will result in increasingly intelligent dashboards that offer deeper insights into financial data.
How does CredFlow utilize real-time analysis to provide small businesses with comprehensive insights?
We leverage AI technology extensively in our backend systems. To deliver meaningful insights, we first conduct an automatic reconciliation of invoices with payments to establish a clear picture of overdue invoices. We then apply algorithms to assess customer creditworthiness and identify high-risk invoices. Our platform handles a substantial volume of communication—around 3 to 4 million messages daily—requiring a robust technology stack that can efficiently manage such demand while sending out reminders and updates to customers.
What emerging technologies do you foresee influencing how small businesses manage their cash flow in the future?
As I mentioned, insights will increasingly shift from algorithm-based to machine learning and AI-driven models. Additionally, communications will become more personalized, taking into account the history between businesses and their clients to enhance effectiveness. Moreover, advancements in projecting cash flows will provide clearer pictures of expected receivables and payables, helping businesses plan and prioritize their financial strategies. These developments will all be driven by sophisticated backend models.
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How does CredFlow distinguish itself from other cash flow management tools in the market?
In the Indian market, very few platforms address these needs effectively. We’ve achieved a few critical milestones: deep integration with existing ERPs, which requires minimal setup and offers a low-cost solution for businesses, is one. More importantly, the insights and analytics we provide are exceptionally detailed, enabling better cash flow management. For instance, our aging reports and automated reconciliations give users a clear view of their financial situations, allowing them to communicate directly from our platform. Additionally, we personalize communications based on historical interactions, enhancing engagement and understanding of projected cash flows.
What’s next for CredFlow? Are there any new features or expansions you’re excited about?
As a company, we are focusing on launching more financial service products. Last year, we introduced lending services, which are gaining significant traction. We’re expanding this product line with options like a line of credit and term loans based on customer transactions on our platform. Furthermore, we recently launched Coberex, which allows users to assess trade scores for various businesses.
Can you share some insights on the reach of CredFlow across India and the number of active users on a monthly basis?
Sure! Our user base spans across India, with significant presence in states like Gujarat, Maharashtra, Delhi NCR, and West Bengal. Some regions, particularly in eastern states, have a bit less penetration due to fewer MSMEs. Currently, we have approximately 95,000 to 100,000 monthly active users. Since our launch, around 1.6 lakh businesses have integrated their Tally with us and used our platform at some point.
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What do you believe are the most important qualities an entrepreneur needs to succeed in today’s fast-changing world?
I believe the first essential quality is the ability to identify and validate the problem you’re solving – it needs to be a significant enough issue that appeals to a large customer base seeking a solution. Secondly, perseverance is crucial. Entrepreneurship is challenging and often lonely, so you need to be prepared for a long journey, potentially over ten years, and willing to make personal sacrifices to create lasting value for customers. Lastly, adaptability and the ability to learn quickly are vital. No one has all the answers, so being open to continuous learning and swift adaptation is key. With these qualities, I believe everything else can be taught and developed along the way.
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