How Sagar Sheth Co-Founder Of goDutch Raised $1.7M To Build An App That Powers Group Payments For Millennials?

Sagar Sheth completed his undergraduate degree in engineering at IIT Bombay. He was always fascinated by entrepreneurship and was also part of the core team of The Entrepreneurship Cell on campus. After graduating, he joined the management consulting firm AT Kearney. After a couple of years there, he joined the PE/VC firm Eight Roads Ventures where he was part of the tech investing team looking at interesting startups at the Series B stage.

The other 2 co-founders, Aniruddh, was previously working with Axis Bank’s Business Technology group while Riyaz was a product manager at InstaReM, a cross-border payments company.

goDutch is a new-age fintech app that powers group payments for millennials. It is founded by IIT Bombay grads with a total work experience of 10+ years in fintech and is backed by global VC investors including Y Combinator.

The app allows users to record expenses with friends (individual or group) seamlessly. Additionally, it also allows them to settle outstanding balances by initiating UPI payments to each other.

In an exclusive interview with AsiaTechDaily ,Sagar says:

“A startup may fail, but an entrepreneur never fails”. What it means is that while you would hope that the startup succeeds, even if things don’t end up panning out well, you will still walk away with a treasure trove of learnings which will hold you in good stead in life. The actionable implication for me from this quote was that don’t be afraid to startup, and once you’ve started up, don’t be afraid of being aggressive & taking risks. Because at the end of the day, there’s so much you’ll gain out of the startup experience irrespective of whether it succeeds or fails. 

• Don’t jump to conclusions too quickly. Put in time & effort to understand someone/something before forming a strong point of view. Also, don’t stick to your initial point of view in the face of contradicting evidence
• Be nice to everyone. Even if you have to go out of your way to help someone, do it. Not just because of good karma but because it’ll make you feel better and more worthy
• Enjoy every moment along the way to achieving your goals. Later in your life, you’ll cherish these memories and value them far more than what you think they’re worth today

Read on to know more about Sagar Sheth and his journey.

What motivated you to get started with your company?

Sagar Sheth: Aniruddh, Riyaz and I, the 3 of us used to live in the same wing in the same hostel at IIT Bombay during our undergrad. All of us would go out on group trips quite often. But we realized people were always hesitant to pay on behalf of the entire group because then the person who paid upfront had to basically after the trip go around knocking on hostel room doors requesting his friends to pay him back. That was quite irritating and inconvenient. Fast forward from there – as we graduated and started living with flatmates, we realized that most of our expenses were group expenses (home rent, furniture rental, food & grocery, ott platforms, movies & concerts, etc.). Again, managing that wasn’t easy as first one person paid on behalf of the group, then manually noted down every expense on Splitwise or Whatsapp and then waited for a few days and sent a few reminders before people eventually cleared the outstanding balance via Paytm, Google Pay, etc.

We realized group payment is a broken process. While many apps exist for one-to-one payments, there doesn’t exist any end to end dedicated solution for managing group expenses. And that’s why we started goDutch.

What is your current main product, and can you share any previous product pivot story to the current product?

Sagar Sheth: goDutch is an end to end group expenses management app. The goDutch app allows users to record expenses with friends (individual or group) seamlessly. Additionally, we also allow them to settle outstanding balances by initiating UPI payments to each other. However, our real innovation is in a first of its kind goDutch card which enables instant group payments. What I mean by instant group payments is that no one pays on behalf of the group but instead everyone is auto-debited their share. Say, if I’m living with 2 other flatmates and we are ordering grocery from BigBasket, any 1 of us can transact using our goDutch card details on BigBasket. Before doing the transaction, 1 of us will open the goDutch app and select the group with which we want to split the payment and decide how we want to split the payment (equal or unequal). Assuming I select equal split with my flatmates’ group and do an Rs1000 transaction on BigBasket, our share of Rs333 will be deducted.

This virtual card is issued in partnership with CSB Bank. Users can get the free virtual card instantly by signing up on the app.

How much money have you raised in total so far? When was the recent funding round? 

Sagar Sheth: goDutch has raised $1.7M in seed funding. Matrix Partners India led the round with participation from Y Combinator, Global Founders Capital, Soma Capital, VentureSouq and marquee angel investors such as Justin Mateen (Co-founder, Tinder), Kevin Lin (Co-founder, Twitch), Rohan Angrish (Head, ICICI Labs) and Sumon Sadhu.    

What were the internal decision processes in determining when to begin fundraising, and what were the logistics for this? And how many investors have you met so far, and how did you meet these investors and which channels worked best for you?

Sagar Sheth: Once we had an initial MVP with real users who gave us valuable feedback on the product and helped us build conviction, we started fundraising. We were fortunate to get selected by Y Combinator, which is the world’s best accelerator and seed-funding program. Given I come from a VC background and given we had YC backing us, we got a lot of inbound interest, and we were able to close our target amount for the seed round ($1.5M+).

What are the biggest challenges and obstacles that you have faced in the process of fundraising? If you had to start over, what would you do differently? 

Sagar Sheth: Every investor has a different way of evaluating startups. And we know that investors reject tens or maybe hundreds of businesses for every investment that they make. So it’s essential not to be fazed by the constant rejection that you’ll face from potential investors. Just take investor feedback seriously, figure out answers to their concerns and keep at the process of pitching to investors. As long as you have conviction about your startup, there will be a few investors who will bite!

What are your milestones for the next round? And what are your goals for the future?

Sagar Sheth: So the goal for the next couple of years is that we want to be the default app people think about when they’re thinking of managing their group expenses. Whether it be college students eating at their canteen, flatmates sharing living expenses, friends going out on trips or office colleagues going out for drinks on a Friday evening – we want them to enjoy their group experiences and create amazing memories without stressing over how to manage the group expenses. We aim to get to a few million users in 1-2 years.

As a company, we also believe that group payments can be an exciting entry point to target group commerce ultimately.

How have you attracted users and with what strategy have you grown your company from the start to now?

Sagar Sheth: We just launched our app in July. We have seen excellent traction driven primarily by early adopters discovering us through social media and sharing it and making it viral. The beauty about this product is that there’s a lot of inherent virality and network effects built into the nature of the product since it’s a product you use with your social network (friends, flatmates, colleagues, etc.). We also have a campus ambassador program to spread the word among college students who share a lot of expenses (canteen meals, hostel stay, etc.).

Which has been the best marketing software tool for the growth of your startup and why? 

Sagar Sheth: The only software we use right now is MoEngage. It’s helping us with basic analytics as well as customer engagement (push notifications, in-app notifications, etc.)

How do you plan to expand globally?

Sagar Sheth: While we’re solving a common problem faced by millennials globally, we’ve started with India because that’s the market we understand the best.

How do you handle this COVID-19 outbreak situation for your company’s survival in the future?

Sagar Sheth: Before the onset of COVID, we were just 3 founders in the company. So we’ve onboarded our entire core team remotely in the past few months, and now we’re 10 team members in total. 

COVID has been both a blessing and a curse for us. Curse obviously because a lot of group outings such as trips, movies, concerts, etc. are not happening today. A blessing because it gives us time to test product features with a limited number of users and keep iterating on the product such that we have an amazing product for our users by the time COVID’s impact ends and normalcy resumes.

What are the most common mistakes founders make when they start a company? 

Sagar Sheth: Some founders directly jump into building a product/business they feel the need for. Ideally, there needs to be enough research which needs to go into validating the problem that the product/business is trying to solve and what the ideal solution for that problem would be. The research could be user interviews & surveys, feedback on an MVP, expert calls, etc. 

So we were a part of this global accelerator program called Y Combinator, and one phrase which was commonly used there and which is also printed on our YC t-shirts is this – “Make something people want”. While this phrase may seem simple and obvious, if we imbibe it into our culture, the implication is that our company becomes a customer-obsessed organization. And everything that we’re doing is not because the founders want it done, but it’s because the customers need or want it. This phrase gives every team member a common guiding principle to work with and ensures that we stay focused on delighting the customer, which we believe by extension will lead to great product metrics and a strong business over time.

What’s the best advice you’ve ever received? And What advice do you have for someone who is interested in doing similar things like yours or in a similar direction?

Sagar Sheth: The best piece of advice I’d read was “A startup may fail, but an entrepreneur never fails”. What it means is that while you would hope that the startup succeeds, even if things don’t end up panning out well, you will still walk away with a treasure trove of learnings which will hold you in good stead in life. The actionable implication for me from this quote was that don’t be afraid to startup, and once you’ve started up, don’t be afraid of being aggressive & taking risks. Because at the end of the day, there’s so much you’ll gain out of the startup experience irrespective of whether it succeeds or fails. 

What are the top-three books or movies (TV series) that changed your life and why?

Sagar Sheth:

• Shoe Dog by Nike’s founder Phil Knight – amazing biography which shows the strength of a driven founder who continues to strive in the face of adversities and build a very large business
• Zero to One by Peter Thiel – amazing read, especially for visionary tech entrepreneurs
• Shark Tank TV Show – for the inspiring stories of common folks emerging from their routine lives to create very interesting consumer products and businesses

How do you keep yourself motivated every day?

Sagar Sheth: Reading and listening about other entrepreneurs motivates me a lot. It tells me that while I’m fighting my own battle with my startup, there are thousands and millions of others across the globe who’re fighting similar battles. It gives a sense of solidarity. 

Also, having co-founders helps – especially if you’re a first-time entrepreneur. Within the 3 co-founders we discuss everything quite openly, and that makes the journey fun and not lonely.

What are the top- three life lessons that you want your (future) sons and daughters to know?

Sagar Sheth:

• Don’t jump to conclusions too quickly. Put in time & effort to understand someone/something before forming a strong point of view. Also, don’t stick to your initial point of view in the face of contradicting evidence
• Be nice to everyone. Even if you have to go out of your way to help someone, do it. Not just because of good karma but because it’ll make you feel better and more worthy
• Enjoy every moment along the way to achieving your goals. Later in your life, you’ll cherish these memories and value them far more than what you think they’re worth today

What would you like to be remembered for?

Sagar Sheth: Nothing fancy. Just for being someone who worked hard to do all that it takes to achieve my goals.

You can follow Sagar Sheth here.

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