INTERVIEW: Dukaan CEO gets candid about the clash with Khatabook now that the app is back on Google Play Store – aims for 15 million shops by March

• The company, which is a part of the startup world’s new favourite term – Dukaantech, helps Indian businesses go online and was launched at the peak of the pandemic.
• Dukaan co-founder and CEO Suumit Shah, in an interview with Business Insider, talks about the growth he had never expected out of an app they had launched on a whim.
• Dukaan is live on the Play Store again after being banned for over a month after a legal battle with Khatabook.

For the barely eight-month-old Dukaan, it’s been a crazy ride. In just eight months, the startup has garnered millions of users, millions in funding, and landed in a soup with a legal battle with Khatabook.

The company, which is a part of the startup world’s new favourite term – Dukaantech, helps Indian businesses go online and was launched at the peak of the pandemic.

Dukaan opens

Dukaan co-founder and CEO Suumit Shah, in a candid chat with Business Insider, talks about the growth he had never expected out of an app they had launched on a whim.

During peak lockdown, Shah got a text from a Jockey outlet with a PDF file with all their items listed, and the text read that you can place your order on WhatsApp and they’ll deliver. This brought up two questions on Shah’s mind – why aren’t they using platforms like Shopify, what happens when they get over 50 orders or how will they keep track of them all.

At this point, Shah was building a company called Rank, which had a tool that lets you know where your business stands on Google Search and other metrics.

“We took a look at the market and decided to build an app that will make it easier for businesses to build their inventory. We built the app in two-three days and immediately started getting a lot of calls,” Shah told Business Insider.

As the calls kept coming in and feature requests kept piling up, they realised that small businesses have their ways of creating catalogues and have different metrics. “People were doing anything to get back into the business,” Shah said and added that they found takers in people who were earlier opposed to online.

Within a week, they had 25,000 orders, and by November, they had over 2.7 million stores created through their platform, which have processed a cumulative ₹100 crore in Gross Merchandising Volume (GMV).

The legal battle with Khatabook

For Dukaan, the fast-tracked growth hasn’t come without legal woes. The Khatabook-Dukaan legal battle became the talk of the town, as the former accused Dukaan of copyright infringement over the source code of the application. Khatabook was also running its own app called Dukaan by Khatabook. After an intense battle in court, Dukaan was ordered to take down its app from all platforms, including Google Play Store.

In an out of court settlement, Khatabook and Dukaan resolved the issue with Khatabook getting nominal equity in Growthpond (Dukaan’s parent company).

And after all that, Dukaan is now live on the Play Store again. Shah looks back at the entire legal battle and says that it has indeed been a roller coaster ride.

“The issue isn’t there anymore, they allowed us to use the name Dukaan, and they’ll keep running their app; we will run ours. India is a huge market, and ultimately, the best product will win. These products need the hour, so the user will rely on the product, which helps you and gives you the output. For example, even when Paytm existed and had so many businesses, Khatabook came and created its own segment. Exactly that way, we have our own space and impact we are creating,” said Shah.

Cashing in big cheques in a short time

Dukaan has been one of those rare startups that has received significant funding within a month of its launch. While there are theories about the financing, Shah says the money came their way because of the popularity of the product.

“In one week, we were trending on top on the Google Play Store, investors were looking at that, and we got a lot of inbound calls. On the first call, we had a term sheet of $17 million. By the end, we had four term sheets on the table, and we had to choose who to go with,” he said.

Dukaan has raised $6 million in seed funding co-led by Matrix Partners India and Lightspeed India Partners. The round also saw participation from angel investors like Haresh Chawla (Founding CEO Network18, Viacom18), Ryan Hoover (Founder, Weekend Fund and Product Hunt), Jitendra Gupta (Founder, Jupiter), Shashank Kumar (Founder, Razorpay), Sandeep Tandon (Founder, Freecharge), Prabhkiran Singh (Founder, Bewakoof.com), and Kunal Shah (Founder, Cred).

But while Shah believes they aren’t growing too fast, he admits he never expected this coming. “In the beginning, a friend of mine knew someone who was a distributor for a big FMCG company. He gave me the deal that he will onboard 15000 stores and give me a 5% stake. I thought about the order; I actually considered it until I got 25,000 orders in a day. So I wasn’t expecting these numbers – the reality has been much better,” said Shah.

“The kind of users were also not expected – people selling bakra on eid, panditji selling satyanarayana pooja ka saaman, these are things I hadn’t expected,” he added.

But now, there’s a lot more to do

Dukaan is back on the Play Store after being down for over a month, which means they have lost out on many incoming users. However, Shah claims that even while they weren’t on the Play Store, they have managed to remain a market leader as they helped the existing users. “By the end of March 2021, having 15 million merchants is what we are trying to achieve,” said Shah.

And they are also coming up with new features to support merchants. “Right now, the basic app digitizes the business. The questions merchants have is how do I get more business. We will build small marketing tools that will help our users market their business — for example, WhatsApp stories. We have built a small tool where you can design WhatsApp stories and display your offers. The next funnel is how do we make sure the sellers get more reach. Online payment functionalities is another thing we are working on,” he shared.

While Shah claims they made $1200 on day one, the focus is now not on revenue but on building the business.

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