It all started with a 20-minute wait. Wait to get a bill and then wait for the remaining change, has changed the way many restaurants in Delhi operate. Natasha Jain, a graduate from Stanford wanted to solve this problem of long, useless wait for the restaurant bill.
She came back to India with an intention to build this offline restaurant payment application, wherein the end-customer could just pay the bill using the app and even receive the bill in his/her email. Within one year, Ruplee has a team strength of 30 with operations in Delhi and Gurgaon, and is entering Mumbai to capture the market.
In a normal restaurant versus a Ruplee partner restaurant, normally, in a usual restaurant after you finish your food, you call for the cheque and wait for it until it comes to you, but if it were a partner restaurant with Ruplee, you can just open the app, request for the bill through app, and after receiving the bill, pay it by using credit or debit card, net banking or online wallet service. You also receive a copy of the bill in the email. Hence, it saves a lot of time.
Since, the app saves previous history, you can even watch your monthly spent in dining out. “It is a payment solution for anybody in offline space. We enable everything that you do for credit card, becoming the payment mode across any merchant in the offline space. Therefore, we say leave your wallet behind,” Natasha added. “We do not aim to be another e-commerce portal, we are just connecting the offline world to online.”
How It Is Different From Others
Ruplee app takes offline restaurant payment experience to online through its mobile app. It connects to a payment gateway where you can pay through wallet, credit card, netbanking or any other payment mode.
However, in last few months, it has pivoted to play a larger role than just a restaurant payment application. For the restaurant owners, the application provides other services like managing social media and even customer analytics. This helps Ruplee expand its service from just commission-based payment to solutions and services model. They provide a report to the restaurant owner which has data about the customer, amount spent, the frequency of visits and choice of menu. “We are now monetizing on transaction analytics to bring the customers back to the restaurant,” Natasha added.
Ruplee started the pilot with its associated restaurants in Delhi, and has managed to built a network of 150-200 restaurants in National Capital Region that transact over Ruplee since its launch. It is now entering Mumbai where it has partnered with 15 restaurants for now. The company plans at expanding in other metro cities such as Pune, Hyderabad and Bangalore. Meanwhile, the startup is also looking at portfolio expansion, and is holding talks with Retail chains, Spa & Salons and delivery services to adopt Ruplee payment. For home delivery, it has tied up with Crusty, Big Wong, Beyond Breads, Queens, Urban Dhaba and more.
Currently, the app has 100K downloads and is adding around 30,000 downloads every month.
A quick look at the sector
A report by IAMAI noted that in next two years there would be 317 Mn smartphone users. Another report by Ken Research shared that digital payments market will be $120 Bn opportunity by 2019, driven by rising number of digital payments. It wrote, “The payment services industry grew at a CAGR of 142.9% during FY’2012-FY’ 2014. Ezetap, Mswipe and iKaaz are some of the major players in the MPOS segment.”
According to the data shared by RBI more than 25 Mn transactions were on the mobile payment and the overall value of these transactions was roughly $3Bn.
And when you combine offline restaurants, health & beauty services and delivery services you are talking about market size opportunity of over $70 Bn cutting across the 3 segments.
Competitive landscape and other challenges ahead
Ruplee is grappling with inconsistency of network and time-taking transactions. “Sitting and ideating in Silicon Valley, while you are building an app your priority is product feature and value to business, but this is not the same in India, because you have to keep the infrastructure in consideration. Network issue is a huge thing for us because it is the app experience getting diluted,” she shared.
Bringing customers on board has been another major challenge for the company, and thus, need to enhance customer education, and create awareness of the product to drive sales. There would be a low-barrier in cities where people are used to online payments for everything, including grocery shopping, traveling and more. The industry will expand as more players enter Like Momoe, Ultracash and Ftcash.
Started in 2014, Momoe is chasing an aggressive target of bringing a million users on board and connecting with over 2000 merchants. It recently raised $1.2 Mn of seed round fund from IDG Ventures India, Jungle Ventures and India Quotient. Another player, LivQuik, started in 2012, was backed by Snow Leopard Ventures last month. They invested over $1.6 Mn in the venture. FTcash too started in August by Sanjeev Chadhak, former CFO at Deutsche bank and Deepak Kothari who joins from Grant Thornton. It is a humble start for the firm from Mumbai, which has already got some 150 merchants on board. It also has players that are into restaurant POS solution.
Posist, a cloud based point of sale solutions provider is another player. Headquartered in Delhi, it serves more than 1500 customers in over 62 cities and 5 countries.
On the other hand, Paytm, is working with offline stores to increase their reach, while MobiKwik has tied up with café chain, Café Coffee day and large format hypermart Big Bazaar.
Ruplee started as a restaurant bill pay service and is indeed trying to enter into a bigger play, with more services, but it is also leaving the niche and getting into mainstream. While this increases the market size of the company, it takes away the essence of how you define it.
The business model circumscribes that of a digital wallet, a POS solution, restaurant analytics and more. In its niche, Ruplee has a potential to make a great impact connecting offline businesses to customers, it also makes a good acquisition case study for a mobile wallet helping it complete the solution. However, it also carries the concern of being crushed by the larger players, who might spread in this space and eat over the business.