If you thought the gig economy only affects startups, think again. Nearly 72% of all gig projects were in large corporates and professional service firms in 2018-19 compared with 52% two years back, says the Professional Gig Economy 2018-19 Report Card’ by gig platform Flexing It. Also, it is estimated that the Indian ‘freelancers’ market size would grow to a whopping $20-30 Bn by 2025.
With such a large opportunity, comes the challenges. Companies such as PayPal and Payoneer are already working to ease the issues around payment collection and learning platforms such as Udemy, Freelancer, UpWork are keeping the plate full for freelancers in terms of skill development. Yet, freelancers of the burgeoning Indian gig economy still face issues such as managing and tracking payments, planning their finances and more.
But tech solutions for gig economy workers are also increasing by the day thanks to innovation in fintech and B2B software. Just like enterprise SaaS changed how businesses used technology to refine their processes, gig economy platforms are targetting this growing class of freelance workers.
In July 2019, FindYogi (acquired by Way2News in 2016) founder Naman Sarawagi through this gap was the perfect opportunity to step into the world of entrepreneurship again with Refrens. Refrens was envisioned as a platform for business service providers to track, collect and manage payments faster and in a credible manner.
“After wrapping up FindYogi, I had a couple of investments that I started giving time to such as Daily Ninja, Holidify etc. Between that, I also start digging up freelance consulting assignments. At that point, I realised the pains on both ends — for freelancers and the businesses seeking them.”
He was joined in his endeavour by former FingYogi CTO Mohit Jain. The platform works with freelancers and small agencies in the field of B2B services such as software development, design, marketing and PR, accounts and finance, coworking spaces, housekeeping agencies etc.
“There are multiple opportunities, right from workflow software, financial services to a marketplace. With Refrens, we are bringing some innovative ways of collecting payments through reputation management,” he added.
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Refrens Invoicing Software: How It Works?
Refrens essentially offers a free web-based SaaS solution that helps users in making and managing invoices with timely reminders and a built-in low-cost optional payment gateway. “A lot of freelancers still manage payment details on excel sheets, convert them to PDFs to send invoices to clients, and sometimes they do not even maintain a record of invoices,” added Sarawagi, about what exactly Refrens is trying to solve.
Freelancers are already using Refrens for dollar invoicing, he said. At present, the startup covers 37 currencies across 100 countries and uses Cashfree as a payment gateway for domestic transactions. For online payments, it charges a nominal fee of 1.65% on all debit cards or UPI transactions and a 2.3% on credit cards, payment gateways and netbanking.
Besides helping freelancers manage their invoices and payment history, Refrens works to help business partners filter out profiles and avoid spam applications. “Freelancers create all sort of profiles, even if they are not actually catering to that category,“ Sarawagi said.
Since the invoicing feature is free for freelancers, there are a few questions on the monetisation aspect for Refrens. But Sarawagi is not overly concerned at the moment. The long-term business goals require creating a high-frequency product that can engage the users on a regular basis, he said. “Invoicing is thus helping us in creating a strong foundation.”
The Ultimate Goal: Building A Value Chain Through Referrals
The push towards monetisation would come as the Refrens network earns maturity. Going ahead, Refrens aims to create a network of businesses that help each other to acquire more customers, like a market network. Sarawagi explained that the market network is more like a business network set up on a marketplace, which acts as a social network on the supply side.
For instance, if an individual hires a wedding manager, they bring in all kinds of contacts for the decorator, designer, and operate on a commission-based model. Similarly, most B2B service providers get new business through referrals from existing clients or other service providers in the value chain.
“HoneyBook, a US-based $70 Mn funded company does the same thing in the wedding category. Word of mouth prevails always, and we are looking to use a similar concept to offer potential leads to suppliers in the near future,” he added.
Once these referrals start coming in, Refrens can start operating on a commission-based model. It is hoping to create a network of around a million freelancers by the end of 2020, which can help the company to capture almost 50% of the Indian market in the next 5-6 years.
It further aims to build custom financial products for freelancers to help them manage their finances for specific sectors. The startup is in talks with insurance companies and banks, while also looking to collaborate with new-age fintech startups for these services.
Sarawagi also told Inc42 that Refrens would be launching international payments via ACH soon. “We are innovating around collecting payments faster from clients who generally pay beyond due date or default. Also, we will be looking at marketing outside India in about two years.”
Harnessing The $150 Bn Freelancing Opportunity In India
In today’s time, the term ‘gig economy’ is not alien to the Indian market anymore. Factors such as internet penetration, rapid digitisation, and advancement in IT services have transformed the dynamics for the labour market across the globe. On one hand, it has offered freedom for Gen-Z workers from mundane 9-6 jobs and also gives both small and large businesses the power to capitalise on talent across the world.
Yet for new-age startups like Refrens, innovation is the biggest challenge. “Building a two-sided marketplace is tough, to begin with. There have been startups in this space that overpromised but never delivered. So we found it difficult to convince people that we are any different,” said Sarawagi about the challenge of convincing businesses to partner up for Refrens’ freelance network
But Sarawagi added that the opportunity is much larger than the risks involved. India is expected to have 20 Mn white-collar freelancers by 2022 with an industry turnover upwards of $150 Bn annually in India alone. Being the youngest nation in the world in terms of the workforce, and grappling with job creation and unemployment issues for the past year, India can certainly become a hotbed of innovation for gig economy workers.
For long, gig economy workers have been shortchanged by the lack of the right tools and services to manage their daily work, and this is ripe for innovation and disruption, given the large market opportunity for sectors such as ecommerce, logistics, foodtech and hyperlocal services.