After 2 Years with No Salary, This Duo Got Their Startup Idea Right

Business reimbursements can suck. If you’ve ever owned a business that has to cover employee expenses like gas or travel, or even if you’ve used these services yourself, you understand that it’s a task that can quickly turn from convenient to a nightmare due to a delay or a misplaced receipt.

A Bangalore-based company is working to change that. Happay cuts down the paper trail and number of staff members required to handle employee expenses. Instead, the service consolidates them into a Visa card that allows the reimbursing company to remain more in control of their expenses than if it had used a card obtained through a bank.


"All over the world, people have been trying to force consumer payments on the consumers," explains Varun Rathi, COO, who co-founded the startup alongside CEO Anshul Rai. Both found that the needs of businesses were changing to become more complex and distributed. They required more customizable payment programs that fit specific businesses’ needs.

The SaaS startup operates much like US company Bento for Business, which allows spending to be approved by a boss over a mobile app, and Karmic Labs, which offers an unlimited number of Mastercard credit cards for businesses to distribute to employees in the US.

Varun says that although Happay offers a service that’s also offered by banks, they don’t compete with them. It provides more of an intermediary service that eases the process for companies, so banks look at the startup as a partner rather than a competitor.

Third time’s the charm

Founders Anshul Rai (left) and Varun Rathi (right)

Varun and Anshul began Happay in 2012 with the idea of working toward making a whole payment platform that worked in real-time for companies. They began by working on employee payment customization and are expanding to try to become the one-stop shop for all of a company’s business expenses. Anshul focused more on tech aspects of the job, while Varun focused on sales, marketing, and the startup’s presence.

2012 was a rough year. Both founders were fresh out of university with only two years work experience. Working on the startup meant going two years without a salary for both founders, and to add to the madness, Varun was getting married around the same time. I bring up that it must have been difficult, and Varun shrugs it off. That’s just part of starting a company, he says. It was even more difficult for the duo’s startup because it’s trying to crack the payments market in India, which is hard to predict. However, their minds were set.

"In India, there are a lot of strict terms and regulations, and any startup will start [planning a] payment with [a] product," Varun says. "That’s where most of our challenges [were]. We tried partnering with the banks [with a] bottom-up approach. All the people in the banks liked the product idea, but it never went to the top management, so we always got stuck."

Varun and his team headed back to the drawing board and decided to get smaller players on their side instead of banks, going for a product aimed at regular consumers. The project worked, and the resulting payment app was about 200,000 users strong, but they weren’t really seeing a profit. They went back to the drawing board.

So they were thinking, "Are we in the right domain? Are we with the right customer?" recalls Varun. Around the same time, they began making better connections with investors that allowed them to partner with the banks. They were finally able to transition into the enterprise-oriented product that Happay is today.

The process was hard, and the founders’ parents were worried, but Varun’s ambition kept his efforts alive. "We always wanted to start something of our own and saw a big point, which was using technology – not just creatively but making a business out of it," he tells Tech in Asia. "That’s what we focused on from the beginning."

Besides, the other option was for both founders to go back to their corporate jobs. They definitely didn’t want to do that.

Smooth(er) operators

When we last talked about Happay in April, it had caught our attention by raising US$500,000 in a seed round from Indian venture capital company AngelPrime.

Varun’s optimistic about Happay’s future and is looking to scale it across India before setting its sights on Southeast Asia.

Happay takes care of all employee expenses that are submitted to the service. Varun’s goal is that it takes care of all the expenses flowing out so that a business’ staffers do not have to log into any bank account.

Though Happay’s just three years old, Varun notes that a day in the office for him has changed a lot from when he first started.

"I always look forward to coming to the office now. It’s very different – we’re much more organized, and there is a proper office and [work times]." Varun adds that he used to work from home, which was a round-the-clock kind of deal. "More than anything, I look forward to meeting all the people who are here, and […] at the end of the day, I just feel: why is the day so short?"

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