15 months, 10 people & 1000 Cr monthly GTV: Castler is pioneering an emerging industry in India
Castler, a pioneering startup that offers digital escrow services, has achieved a 6500% growth in GTV (gross transaction value) in just one year. In July 2021, the company had a GTV of Rs.15 crore, while that number has gone up to Rs.1000 crores by July 2022.
In the same time period, it has increased its customer base by 384%, from 31 to 150. The number of accounts opened has also increased by 3200%, from 50 to 1650. The average overnight balance has increased 525% from Rs.8 crore to Rs.50 crore in the same time period, while the number of escrow transactions has gone from 855 to 50,000, which is a 5748% increase.
The 15-month-old company has managed to do this with a 10-person team, headed by co-founders Dinesh Kumar and Vineet Singh. Singh, a startup veteran with more than 25 years of experience in companies like Naukri, 99acres and MobiKwik, is also the CEO. With another $1 million in seed funding secured in June 2022, the company plans to expand 10x.
Castler provides end-to-end modern escrow services suitable for the new era of companies that conduct their business over the internet. The company was started in 2021, and has already onboarded trustworthy names such as YES Bank as a client and counts Rainmatter – Zerodha’s venture capital arm – among its investors.
Singh’s initial idea had been to build a safe transaction solution for both buyers and sellers, but the self-evident burgeoning of internet businesses led him to escrow banking.
Singh feels that escrow banking alone is a sizable market to build a large business with a clear path-to-profit. Having years of experience working with internet-based businesses such as Naukri (InfoEdge) and MobiKwik, his modus operandi is focussing on niches.
“Our plan is to target one niche, solve the problems well, take a reasonable market share in that space, ensure that customers pay for what you solve for them, and then broaden your horizons,” said Vineet Singh. With this thought process, Castler wants to build its brand and credentials and then offer a broader suite of products and services.
Escrow is essentially a traditional solution with new-found applications. An escrow is a financial agreement wherein a neutral third-party intermediates between two people or businesses that have agreed to exchange value, i.e. buying and selling. The intermediary takes control of money, and tangible/intangible assets that are to be exchanged until the conditions of the transaction’s contract are met. This minimises risk, establishes trust, and secures funds.
The opportunity is massive for businesses like Castler, because online businesses are littered with risks.
Around 1 lakh companies in India use escrow accounts, according to industry estimates. Escrow deposits worldwide are worth $100Bn, and the market is poised to grow to $260Bn by 2030.
Castler’s services span the process of setting up and operation of escrow accounts online, including services such as eKYC, eAgreement signing, digital account opening, and online escrow transactions, along with real-time notifications about the transaction status.
Castler now offers escrow services across the B2C segment, including property resale and rental deposits, used vehicles, freelancing & contractual services; as well as B2B including escrow services for mergers & acquisitions, gaming, and companies owning an RBI-issued Prepaid Payment Instrument license.
“We are small but we work like a very serious business. We think and plan like a large organisation but execute like a startup and this is imperative for the space that we operate in,” said Vineet Singh. “Banks act as a guidepost on what to do and what not to do, that is why we have to say no to 80% of business that comes our way”.
The company’s 2022 seed funding totalled to $1 million; the round was led by Rainmatter, with participation from Venture Catalysts, 9Unicorns, Faad Network and LetsVenture. Castler previously raised a $500K idea-stage pre-seed round from Venture Catalysts, 9Unicorns, LetsVenture and AngelList.
The company also has a confidence-reinforcing captable which includes the likes of Naveen Kukreja, co-founder & CEO of Paisabazaar, Dhruv Agarwala, CEO-REA India (Founder-Housing.com; Proptiger), Apurva Salarpuria, Salarpuria Family Office, Archana Priyadarshini, General Partner at Pointone Capital, Vivek Khare, Ex-CorpDev Head at Info Edge (Investor in Zomato, PolicyBazaar), Deepak Gaddhyan, Chief Credit Officer (Wholesale) at RBL Bank, Ajay Rajan, Senior Group President, Yes Bank.
Castler is a pioneer in the field of Digital Escrow in India. Founded by Vineet Singh and Dinesh Kumar, both startup veterans, in 2021, the company’s endeavour is to build a transaction banking-focused escrow banking solution for enterprises for both domestic and cross-border transactions. It also wants to democratize the escrow product for mass adoption amongst consumers and MSMEs to eliminate fraud.
Castler’s proprietary Digital Escrow Banking Suite provides its clients with a unique ‘Open, Own & Operate’ escrow solution that ensures trust and transparency in every transaction.