Behind Building India's 100th Unicorn Open

Anish Achuthan, co-founder and CEO, Open tells us about his personal journey so far and the journey of the unicorn that he and his co-founders have built

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Anish Achuthan, co-founder and CEO of Open decided to embark on the journey of entrepreneurship when he was just 15 years old. This was after he read the inspiring story of Hotmail's Sabeer Bhatia. There has been no stopping ever since.

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From running away from home right after class 10 and living in a temple for two to three years to launching 4 fintech startups before Open, including iFuturz Wireless in 2001, CashNxt in 2077, Neartivity Wireless in 2009 and Zwitch in 2013, he has done it all.

How Achuthan became an entrepreneur

Born and brought up in a small town near Kozhikode, Achuthan's first childhood dream was to become a journalist. To fulfill that dream, he would read many newspapers and magazines every day from the age of 7 or 8. By the time he was 10, his reading habit exposed him to a lot of things like the internet, even though he was 300 kilometers away from having internet access. This pushed him to create his first email ID when he was just 12. He thought that dot-com was a good way for him to connect as a journalist to the world. And after class 10, he went on to create a dot-com portal that was similar to Rediff and Yahoo News, which had reviews, movie reviews, etc.

It was also at that point of time, in 2001, that he happened to read the story of Sabir Bhatia and how he built Hotmail. This inspired him to become an entrepreneur. Coincidentally, he also read in a Sunday supplement about the concept of venture capitalists. "This actually made me think that you don't really have to be born in a rich family or have a lot of money to actually start a business," he said.

After this, he ran away from his house and moved to Trivandrum. For nearly three years, he stayed in the temple, where he was fed prasad which was basically a meal and he was allowed to sleep there. In this period, he kept meeting his three friends, his co-founders, who used to go to college. Later, the portal got acquired by a popular media group. That is how Achuthan started his entrepreneurial journey.

How Open was ideated

Achuthan and his co-founders Ajeesh Achuthan and Mabel Chacko had around 10 to 12 years of experience in the fintech space before starting Open, which is their fourth startup together. They used to deal with a lot of the small business owners who would talk about the pain points in traditional banking methods. They felt that these entrepreneurs struggled a lot in terms of tracking their cash flows, managing their accounting, payroll etc. There was no integration between these systems and that was taking a lot of time and energy away from these business owners.

"We thought the better way to solve this is through banking because your current account is where all your money comes in and goes out. And if you're able to automatically reconcile that with your accounting system and payroll, it can help entrepreneurs save a lot of time and they can focus on their core business.," he said. Achuthan.

That is how Achuthan and others, along with Deena Jacob, the fourth co-founder of Open, who was with Taxi For Sure earlier and was one of the clients of Achuthan's startup, decided to launch Open in 2017.

On May 2, this year, Open announced its series D funding round from IIFL along with existing investors Temasek, Tiger Global and 3one4 Capital and with this round, Open was valued at $1 billion making it the 100th entrant in India's unicorn club.

How the offerings have evolved

Open's initial offering was a business bank account with a suite of tools to help businesses manage their receivables and payables. "If earlier, an entrepreneur was using multiple tools like bank account, a separate invoicing software, a separate accounting software, we brought all of them together into one unified platform," he said.

Today, not only do over 23 lakh businesses use the platform, but Open is also an end-to-end financial automation platform based on bank accounts. So unlike your traditional bank, where you actually open a current account and get internet banking just to transfer funds and manager statements, Open offers a rich dashboard with a lot of automation, which takes care of reconciliation of customer payments, payroll, GST, compliance and everything.

And over a period of time, the co-founders started adding functionalities like things to manage one's online spend by helping them issue different cards to different departments or different employees etc. Today, Open processes around $30 billion of annualized transactions on the platform.

In the process, they also realized that a lot of their banking partners were also trying to launch neo banks because the current banking dashboard they were offering was not really in line with what today's customers needs. "So they started approaching us and we realized the need for creating an enterprise banking division," he said. Open created this division a year ago which is today deploying neobanks for around 15 or 16 banks in the country. It also has deployments going on in Philippines and Middle East as well.

Open also has a third division wherein it powers its infrastructure to help other fintechs or non-fintechs launch various fintech services. For instance, if somebody wants to launch a neobank or someone wants to issue cards, Open has a division that provides this infrastructure.

How a right decision became a turning point

According to Achuthan, one of the best decisions that he and other co-founders made was partnering with one of the banks eight or nine months into their journey, with exclusivity for nearly one year in exchange for distributing its platform to their existing set of customers.

"We were not very sure if we should go with exclusivity or not. But that decision actually worked very well for us, because that helped us establish our product among the initial set of customers because today's SMEs or business owners don't even trust bank, so how would have they trusted us?"

Achuthan also spoke about some key mistakes that they did on the way. "I think probably some of the mistakes were in the very early stages of the company when we tried to bring in people who had like probably 10-15 years of experience when processes were not set. I believe each stage of the company requires a different set of skills. Then the second mistake was saying no to certain banks. Our enterprise division used to get a lot of inquiries from banking partners to help them launch their own neobank, but we thought it would cannibalize our existing business and said no to many."

How Openers collaborate and operate

Open is a 530-member team today and when it was started there were 20 people. "All the initial teammates I used to work with I had worked with them in the past three, four organizations together. And we'd been also very, very selective in terms of who we actually hire into the company. Very early on, we got somebody to lead our people and culture function who actually set the guidelines for what would be the culture and what kind of people should be hired," he said.

Achuthan believes one can always do a lot of things from an HR perspective, but people will not feel it unless you get the DNA right from the beginning. He believes Open had all the ingredients of a cultural disaster such as 80 per cent of the initial team was people he had earlier worked with, and 80 per cent from Kerala. However, it was this DNA that kept them together. Today, the startup has people from 21 different states.

The culture is also set on other factors. For example, 35 to 30 per cent of the people in the organization are people who are not typically considered to be employable by other companies. For example, there could be people who have taken on a sabbatical of 10 years. Achuthan believes when such people are brought in, trained and given opportunities, the team develops a family bonding.

"When you are working in Open, all the things are taken care of like a family. And when the pandemic happened, unfortunately, we lost a few of our employees. The family members of those employees are today working in this organization. We don't put such things on social media, but this is very important to us. And these are things which are not a company policy alone. All the Openers come together during tough times. And, every manager has the right to take any decisions that can help the employees in their team. From the beginning, we all have had a connection that helps us sail together through all the tough situations. When the bond is created from day one, I think it is easier during tough times as everybody understands."

How Achuthan stays motivated

"What motivates me as an entrepreneur is that I always get the kick out of creating something. When people use our product, the satisfaction that I get is immense. Or, when I see people talking about our brand, I would say that's the biggest motivation for me," he said.

For Open, the focus is going to be on the 61 million (approx) MSMEs in the country. Achuthan believes they have barely scratched the surface, and there's a lot more to be bridged. "So today, what we are doing is financial automation on top of banking, but now building up the lending products in terms of like using this data to provide better Capital to help these businesses grow is our goal," he said. Besides focusing on MSMEs, Open also aims to become the default digital banking service.

Dear readers, you can also listen to the podcast of this interview here.