In India, start-ups are quietly developing the tools and platforms needed for a new economy: micro-entrepreneurs can tap the growing access to the Internet to sell goods and services online.

Instamojo, a seven-year-old Bengaluru-based startup, has mobilized a $ 7 million B-series to reach more than one million SMEs and micro-SMEs in India.

Founded in 2012 as a side project, Instamojo provides independent merchants with the means to operate an optimized showcase for mobile devices, collect payments and even take micro-loans. In an interview with TechCrunch, CEO and co-founder Sampad Swain said the company had about 650,000 merchants and added an additional 1,200 per day. Most of them, he said, tend to earn less than $ 30,000 in annual sales; about half sell physical products, such as e-commerce items, and the rest use Instamojo to bill for physical services or to sell digital items such as courses.

The idea is to tap into those who have just tested the water of commerce online and give them the tools to develop their nascent business while the "population" Internet of India exceeds 400 million inhabitants.

"Many micro-traders in India are adopting [India’s payment service] UPI [through services like Paytm and PhonePe] but once they get a little more serious, around 10 to 20 sales a month, we ask: "Can we give you loans, logistics, an online store?" "says Swain, who launched the company with co-founders Akash Gehani and Aditya Sengupta.

It is a market that is of little concern to banks or financial institutions because small loans and small sales require a very large scale to be relevant. But Swain is optimistic and thinks the company will exceed one million retailers this year.

The new financing is led by existing investor AnyPay – the Japanese fintech start-up -, along with other previous lenders, Kalaari Capital and Beenext, and angel investor Rashmi Kwatra. Gunosy Capital, the VC arm of Gunosy's Japanese news app, has joined the group as a new investor. The transaction brings about $ 9 million worth of investors to date for Instamojo.

Instamojo earns revenue through a 2% reduction in sales, successful delivery charges and commissions on its microcredit product, which essentially gives merchants early (same or next day) credit on their sales. The loans – which Swain describes as "in-bag" loans – come from Instamojo's new Mojo Capital unit, which includes partnerships with 12 financial organizations. In just four months, Instamojo has granted approximately $ 4 million in credit – with 50,000 dispersions – and Swain expects to achieve a growth rate of $ 30 million by the end of the year.

"Even I am surprised!" He said about the quick adoption.

Founders of Instamojo [left to right] Akash Gehani, Sampad Swain and Aditya Sengupta

Unlike Meesho, a microentrepreneurship service in India backed by YC that recently raised $ 50 million, Instamojo is not dominated by e-commerce with friends, family and neighbors. Mr. Swain said the typical Instamojo vendors were looking to access a different audience than the ones they knew, with platforms such as YouTube, Facebook, WhatsApp and others that are commonly used to reach an audience. The main selling point of Instamojo is the ease of sale; it's thanks to a unique link that sellers share with customers for payment, which avoids some of the problems associated with online payment in India, which include somewhat tedious steps for card transactions.

"The sellers simply create a link and share it with the customer," explained Swain. "Basically, they click and consult with a debit or credit card or some other means. Over the years, we realized that this was the best start for our company. "

It was the first launch of Instamojo. Since then, the company has developed online store options to manage inventory and products, as well as the recent launch of credit. Beyond expanding his size, Mr. Swain said the next priority would be to develop a community for traders, where they could share tips, collaborate and more. It also aims to strengthen the technical team and bring the Instamojo workforce from 120 currently to around 250 by 2020.

For the time being, Swain said the company was not looking for opportunities abroad, although he admitted that his business could extend to regions like the United States. Africa or Southeast Asia. But more immediately, he sees a huge opportunity in India, where he thinks that there are 65 million SMEs, of which 25 million are "micro-merchants", which will have to be attacked at first. The company plans to hold a Series C round later this year to fund a more aggressive campaign.

Article updated 16/01/19 07:55 PST to correct the names of the co-founders of the company.