From IIT to Expense-pertise: The Happay Tale

Anshul Rai and Varun Rathi, both graduates of the Indian Institute of Technology (IIT) Kharagpur, co-founded Happay in 2012. Anshul Rai earned his degree in Computer Science in 2010. After graduation, he joined Microsoft Research Lab, where he worked for two years. During his tenure, he focused on solving complex problems through technology, filed two patents, and published four research papers in international journals. This experience honed his skills in innovation and technological development. (Anshul Rai)

Varun Rathi, also a 2010 graduate of IIT Kharagpur, comes from a business-oriented family. After completing his education, he joined the Tata Group. However, he found the role lacked the dynamism he sought. With a passion for technology and entrepreneurship, Varun aimed to create solutions that simplify everyday tasks. His business acumen and drive for enhancing user experiences became instrumental in shaping Happay’s growth. (Varun Rathi)

The inception of Happay stemmed from the founders’ desire to simplify peer-to-peer payments. They envisioned a system where sending money was as easy as sending a text message. This vision led to the creation of the Happay mobile app, a digital wallet allowing users to pay anyone using just their mobile number, eliminating the need for bank account details. Despite acquiring over 200,000 users, the team struggled to find a profitable revenue model in the consumer segment. Recognizing a significant gap in the business-to-business (B2B) payment sector, they pivoted to focus on providing comprehensive expense management solutions for companies.

In this new direction, Anshul leveraged his technological expertise to develop robust solutions, while Varun utilized his business skills to drive sales, marketing, and operations. Their combined efforts have positioned Happay as a leading provider of expense management solutions, catering to a diverse clientele and addressing the complex financial needs of businesses.

The Money Trail: Tracking the Billion-Dollar Expense Management Boom

The expense management software market has experienced significant growth in recent years, reflecting the increasing need for businesses to streamline financial processes and enhance operational efficiency. In 2023, the global market size was valued at approximately USD 7.08 billion. Projections indicate that this market will continue to expand, reaching an estimated USD 16.48 billion by 2032, with a compound annual growth rate (CAGR) of 10.1% during the forecast period. (Fortune Business Insights)

Several factors contribute to this robust growth. The increasing adoption of cloud-based solutions allows organizations to manage expenses in real-time, providing flexibility and scalability. Additionally, the integration of artificial intelligence (AI) and machine learning (ML) into expense management systems enables predictive analytics, helping businesses forecast spending patterns and identify cost-saving opportunities. These technological advancements not only improve accuracy but also reduce the time spent on manual processes.

The rise of remote and hybrid work models has further fueled the demand for efficient expense management software. With employees operating from various locations, companies require systems that facilitate seamless expense reporting and reimbursement processes. Mobile-friendly platforms have become essential, allowing users to submit and approve expenses on the go, thereby maintaining productivity and compliance regardless of physical location.

Regionally, North America holds a significant share of the expense management software market, attributed to the early adoption of advanced technologies and the presence of major industry players. However, the Asia-Pacific region is anticipated to witness the fastest growth rate during the forecast period. This surge is driven by the rapid digital transformation of businesses, economic expansion, and the increasing awareness of the benefits associated with automated expense management solutions.

A Mission with Commission: How Happay is Changing the Way Businesses Spend

Happay’s mission is to simplify and automate expense management for businesses, enabling them to achieve greater efficiency and control over their financial processes. The vision of Happay centers on transforming traditional, manual expense workflows into streamlined, paperless operations. By leveraging advanced technologies such as artificial intelligence and machine learning, Happay aims to provide intuitive and intelligent platforms that adapt to the evolving needs of modern enterprises. (About Happay)

Happay addresses several critical challenges faced by organizations in managing expenses. Traditional methods often involve cumbersome paperwork, delayed reimbursements, and a lack of real-time visibility into spending. These issues can lead to inefficiencies, errors, and potential compliance risks. Happay’s solutions automate the entire expense reporting process, from capturing receipts to approval workflows, thereby reducing manual errors and processing time. This automation ensures that companies maintain compliance with internal policies and external regulations, while also providing actionable insights into spending patterns.

Operating on a Software as a Service (SaaS) model, Happay offers cloud-based platforms that integrate seamlessly with existing enterprise systems, including accounting and ERP software. This integration facilitates a unified approach to financial management, allowing businesses to scale their operations without significant infrastructure investments. Happay’s business model focuses on delivering customizable solutions tailored to the specific needs of diverse industries, ensuring flexibility and adaptability in various business environments.

Receipt and Repeat: Happay’s All-in-One Toolkit for Expense Management

Happay offers a comprehensive suite of products designed to revolutionize travel, expense, and payment management. By integrating cutting-edge technology with business needs, Happay delivers automation, compliance, and efficiency. 

Expense Management Software

Their expense management platform is built to eliminate manual effort, improve compliance, and streamline expense workflows. It includes the following advanced features:

• Xpendite: Automatically captures expenses at the source using OCR (Optical Character Recognition), WhatsApp integration, and email parsing. It reduces data entry errors and provides 100% accurate, real-time expense data.
• SmartAudit: Leverages machine learning algorithms to detect duplicate invoices, overclaimed amounts, and mismatches. It ensures policy compliance by flagging violations instantly.
• ApprovNow: Offers automated, role-based approval workflows. Managers can approve or reject expenses with a single click using real-time notifications and access to a complete audit trail.
• DeepAnalyze: Provides granular insights into expense patterns, compliance adherence, and top spenders. It supports downloadable reports in multiple formats (CSV, PDF, PNG) for efficient analysis​​. (Expense)

Travel Management Software

Their travel management platform integrates seamlessly with corporate policies and third-party services for a hassle-free booking experience. Key technical highlights include:

• Self-Booking Tool: Employees can book flights, hotels, and cabs from multiple travel suppliers while ensuring dynamic policy compliance. The tool integrates with GST-compliant booking systems to capture state-wise GST details automatically.
• Dynamic Travel Policies: Configurable policies enforce compliance for booking approvals and expense limits. Approvers are notified of any policy violations during the process.
• Fare Freeze: A built-in fare locking mechanism prevents price hikes caused by delayed approvals, saving up to 50% in costs.
• Duty of Care: Integrates safety updates, including geopolitical and biohazard alerts, ensuring the well-being of travelers.
• Integrated Workflows: Combines travel booking with automated expense filing for error-free and seamless management​​. (Travel)

EPIC+ Integrated Payments Platform

Happay EPIC+ is designed for complete control over business payments and vendor management. Its technical features include:

• Vendor Management: Onboard vendors using GSTIN and PAN validation. The platform retrieves vendor data automatically and validates bank accounts with penny-drop verification.
• Payment Automation: Supports scheduling of recurring payments, ensuring on-time settlement and reducing manual intervention. Payment options include debit/credit cards, UPI, and bank transfers.
• Invoice Lifecycle Management: Automates the generation, approval, and payment of invoices, with real-time tracking of status updates.
• Invoice Financing: Enables businesses to access unsecured credit lines up to 90 days. Compare bids from multiple lenders directly on the platform​​. (EPIC)

Prepaid Card Solutions

Their prepaid card solutions address specific business needs, offering robust control and compliance for cashless payments. Technical functionalities include:

• Card Management: Issue, load, and manage cards through a centralized system with real-time updates. Cards can be blocked, deactivated, or hotlisted instantly.
• Spend Controls: Set daily/weekly limits and restrict merchant categories (e.g., grocery stores, liquor shops) and payment modes (ATMs, POS).
• FleetXpress Cards: Integrate fleet-specific cards with expense tracking systems to monitor spending across drivers and vehicles.
• FlexiBenefits Cards: Automate reimbursements for employee tax benefits such as food, fuel, and rewards, eliminating paperwork​. (Prepaid Card Solutions)

Mobile App

Their mobile app empowers employees and managers to manage travel and expenses on the go. Advanced app capabilities include:

• Expense Capture: Features OCR with an 81% accuracy rate for scanning receipts. Other capture methods include WhatsApp integration, email parsing (Gmail, Outlook), and GPS-based route tracking.
• Audit and Approvals: Built-in smart auditing flags policy violations as soon as expenses are filed. Managers can approve expenses via one-click notifications with access to detailed audit trails.
• GST Compliance: Automatically captures GST details for travel bookings, ensuring hassle-free ITC claims​. (Application)

Advanced Analytics

Their analytics platform transforms raw data into actionable insights, helping businesses optimize costs and improve efficiency. Features include:

• Customizable Dashboards: Rearrange widgets, select specific reports, and tailor views for various roles like finance heads or department managers.
• Real-Time Filters: Drill down into data by time periods, categories, or departments to uncover granular insights.
• Automated Reporting: Export reports in table or graph formats (PNG, PDF, CSV) to integrate with existing business intelligence tools.
• Compliance Insights: Track top violators, recurring policy breaches, and inefficiencies, enabling businesses to make data-driven decisions​. (Analytics)

Integration Capabilities

Happay integrates seamlessly with leading ERP, HRMS, travel agencies, and payment gateways. Key integrations include:

• ERP and Accounting Software: Real-time sync with SAP, Tally, QuickBooks, and other platforms for smooth financial management.
• Travel and Fleet Systems: Integration with major travel agencies and fleet management software ensures end-to-end visibility.
• GST and Tax Automation: Automatically extracts and verifies GST details for tax compliance​​. 

Code and Control: The Tech Behind Happay’s Expense Wizardry

Happay leverages advanced technology to streamline expense management for businesses. Their platform integrates artificial intelligence (AI) and machine learning (ML) to automate and enhance various financial processes. By employing AI, Happay’s system can intelligently categorize expenses, detect anomalies, and ensure compliance with company policies. This reduces manual intervention and minimizes errors, leading to more accurate and efficient expense reporting.

The platform’s architecture is built on a modern tech stack, utilizing robust programming languages and cloud services to ensure scalability and reliability. This foundation allows Happay to handle large volumes of transactions seamlessly, catering to the needs of both small businesses and large enterprises. The use of cloud infrastructure also enables real-time data processing and accessibility, allowing users to manage expenses from anywhere with internet connectivity.

Happay’s mobile application complements its web platform, providing on-the-go expense management capabilities. The app allows users to capture receipts, submit expense reports, and receive approvals directly from their smartphones. This mobility ensures that employees can manage their expenses promptly, reducing delays in reimbursement cycles. The intuitive design of the app enhances user experience, encouraging widespread adoption within organizations.

Integration is a key aspect of Happay’s technological innovation. The platform seamlessly connects with various third-party applications, including leading Enterprise Resource Planning (ERP) systems, Human Resource Management Systems (HRMS), travel agencies, and credit card providers. This interoperability ensures a unified approach to financial management, reducing the need for manual data entry and minimizing the risk of discrepancies.

Security is paramount in Happay’s technological framework. The platform employs industry-standard encryption protocols to protect sensitive financial data. Regular security audits and compliance checks are conducted to safeguard against potential threats. By prioritizing data security, Happay builds trust with its clients, assuring them that their financial information is handled with the utmost care.

Trophies, Trust, and Transformation: Happay’s Winning Streak

Their comprehensive platform has attracted a diverse clientele, including startups, SMEs, and large enterprises, demonstrating its versatility and effectiveness. By automating expense reporting and integrating seamlessly with existing systems, Happay has enabled organizations to enhance efficiency, maintain compliance, and gain real-time insights into their spending patterns. 

The company’s commitment to excellence has been recognized through several prestigious awards. Notably, Happay received the CIO Choice Award for Best Travel & Expense Management Platform in 2019, 2020, and 2023. This award is particularly significant as it is determined by the votes of Chief Information Officers (CIOs) across various industries, reflecting the trust and confidence that IT leaders place in Happay’s solutions.

In addition to the CIO Choice Awards, Happay has been acknowledged by G2, a renowned peer-to-peer review platform for business solutions. In 2023, G2 recognized Happay as a Leader in India and Asia in the Expense Management category, as well as a Leader in India in the Travel & Expense Management category. These accolades are based on user reviews and satisfaction scores, highlighting Happay’s positive reception among its users.

Furthermore, Happay was honored with the “Excellence in Payments” award at the CFO Summit in December 2022. This recognition underscores the company’s contributions to enhancing payment processes and its role in driving financial innovation within organizations. (Spend Management Software)

It Takes Two to Tango: Happay’s Strategic Partnerships

In April 2024, Happay announced a significant partnership with Grant Thornton Bharat, a leading consulting firm in India. This collaboration aims to transform enterprise expense management by combining Happay’s advanced technological solutions with Grant Thornton Bharat’s deep market insights. Together, they focus on implementing robust, scalable solutions to address prevalent challenges in the expense management sector, enhancing operational efficiencies and financial transparency across various industries. (Business Wire India)

Earlier, in March 2018, Happay joined forces with HDFC Bank to introduce a prepaid card linked with a Travel and Entertainment (T&E) expense management solution. This initiative enables Indian enterprises to manage their business travel expenditures more effectively. The partnership allows business travelers to seek trip advances, get itineraries pre-approved, book trips, and file expenses digitally through Happay’s mobile app. Management can oversee employee cards online, load or withdraw funds, set limits, and track travel expenditures in real-time, thereby streamlining the entire T&E process.

In November 2018, Happay collaborated with Uber for Business to automate travel expense management. This integration allows employees to use their existing Uber app for business travel by switching to a business profile set up by their company. Ride data is automatically populated in Happay, with receipts linked to expense entries, eliminating manual entry and reducing errors. This partnership simplifies the process for employees and provides employers with complete visibility into ground transportation spending, leading to substantial cost savings and improved control over travel expenses.

Additionally, Happay has established a partnership program inviting banks, value-added resellers, and strategic consultants to collaborate. This program aims to expand business opportunities and enhance service offerings. For instance, banks can access Happay’s state-of-the-art technology stack to enter new markets without extensive in-house development. Value-added resellers can integrate Happay’s products with customers’ existing systems using simple API connectors, providing cohesive solutions. Strategic consultants, including affiliates, accounting partners, and auditors, can leverage Happay’s brand to offer innovative solutions to their clients, supported by joint marketing efforts and comprehensive onboarding support. (Spend Management Software)

Cash Flow Chronicles: How Happay Stacked the Cash for Success

Happay has successfully raised a total of $22.3 million in equity funding across seven rounds, supported by 11 investors, including nine institutional investors and two angel investors. The company began its funding journey in April 2013 with a $500,000 seed round led by Prime Venture Partners and Times Internet. This initial funding helped establish Happay as a promising player in the expense management sector. (Tracxn)

In July 2015, Happay raised $7.2 million in a Series A round led by Prime Venture Partners and Peak XV Partners (formerly Sequoia Capital India). This round significantly boosted its pre-money valuation to $17.6 million, post-money valuation to $24.8 million, and generated an impressive revenue multiple of 96.4x based on a TTM revenue of $179,000.

The Series B funding rounds further accelerated Happay’s growth. The first round in November 2017 raised $10 million, with institutional investors like Peak XV Partners and AME Cloud Ventures, corporate investors like Axiom Capital Management, and angel investors Ben Nelson and Brad Garlinghouse. The pre-money valuation rose to $46.2 million, with post-money reaching $56.2 million. By December 2017, an additional $250,000 round increased Happay’s valuation further and supported its expanding operations.

In 2019 and 2020, Happay secured additional Series B funding rounds of $3.1 million and $788,000, respectively. These investments by Alteria Capital and Greyhound Capital Management valued the company at $141 million in post-money valuation by 2019. By this time, Happay’s TTM revenue had climbed to $5.8 million, demonstrating consistent financial growth.

Happay’s financial metrics reflect its strong performance over the years. Revenue grew steadily from ₹3.5 crore in FY 2015-16 to ₹106.5 crore in FY 2022-23. This consistent increase highlights the company’s ability to scale its operations while maintaining financial sustainability.

Spend Smart, Grow Fast: Happay’s Blueprint for Success

Happay is transforming how businesses manage their expenses. It automates manual processes, making tracking and reporting easier for employees and managers alike. The platform integrates advanced technologies like AI and ML to streamline expense approvals, enforce company policies, and provide real-time financial insights. From travel management to corporate card solutions, Happay addresses every pain point in corporate spending. Its user-friendly interface and seamless integrations with ERPs and HR systems make it a go-to solution for businesses of all sizes.

Happay doesn’t just stop at simplifying expense reporting. It enables companies to gain complete visibility and control over their spending. Its robust analytics tools uncover trends, highlight inefficiencies, and guide financial decisions. Businesses using Happay save time, improve accuracy, and reduce costs while ensuring compliance with internal policies and regulatory requirements.

This startup has also fostered a strong reputation through impactful partnerships and collaborations. It works closely with banks, consultants, and technology providers to deliver customized solutions for diverse industries. Happay’s steady revenue growth and accolades like the CIO Choice Award underline its success in addressing modern business challenges.

Happay’s journey showcases the power of identifying a real-world problem and solving it with innovation. Their ability to adapt, pivot, and scale is a blueprint for aspiring entrepreneurs. For more stories of successful startups and insights into venture building, check out Venture Kites.