Legal Raasta Technologies Pvt. Ltd, which provides legal services to small and medium-sized enterprises (SMEs), entrepreneurs and professionals through an online platform, has raised its Series A round of funding from a North India-based growth-stage venture capital firm, a top company executive told VCCircle.
The company, which runs its services through legalraasta.com, has raised nearly $5 million (around Rs 32 crore) from Delhi-based VC firm Impanix Capital, said Himanshu Jain, one of the co-founders.
VCCircle was the first to report this March that the company is in the markets to raise its Series A round of funding.
Legal Raasta, which was launched in June 2015, intends to use the funds in building Good and Services Tax (GST)-compliance software for SMEs, CAs and enterprises.
“We will be offering both standalone GST software and an API interface to connect ERP (such as SAP, Oracle and Tally) with GST systems. We have already applied as a GSP provider (GST Suvidha Provider) with the government,†said Jain.
Legal Raasta plans to serve its existing SME clients and more than over 80 lakh potential SMEs to be covered under GST regime. It claims to be simplifying GST filing through features such as reconciliation, excel upload, app-based GST filing, etc. The company already offers ITR and TDS software.
GST, which will subsume almost all indirect taxes in India, is seen as the single-biggest tax reform in the country since independence. It is all set for rollout in July.
“Our aim is also to invest this money in building our technology and operational team. We will scale up the team to 300 people over six months,†said Pulkit Jain, the other co-founder of the firm. As part of the process, the company has got RK Jain, who is an expert on value-added tax (VAT), as an adviser on its board.
“GST is a big opportunity and many organised tax players will emerge. A 5-10% market share translates into huge revenues,†said Archit Bhargava, a venture partner at Impanix Capital.
Impanix Capital, which is primarily a sector-agnostic investment firm, was launched in 2015. The fund, which is led by former financial consultant Sanjeev Bhargava, typically invests $250,000-$2 million in its portfolio companies.
Legal Raasta has also set up a 24x7 helpline for SMEs to get in touch with experts and get their queries on GST registration answered.
The company, which has served over 80,000 SMEs to date, claims to have clocked revenues of nearly Rs 10 crore during FY2016-17. Its services include company registration, income tax return filing, tax deducted at sources filing and trademark, among others.
It raised $1 million (around Rs 6.7 crore) in angel funding from two high-net-worth individuals, Pravin Khandelwal and Yatin Kumar Jain, in April 2016.
The legal and compliance service market in India is estimated at Rs 40,000 crore and is growing at 25% year on year. In addition, GST compliance is expected to be a Rs 17,000 crore market.
Startups providing legal services have been attracting investments over the past few months. In December, MyAdvo Techserve Pvt. Ltd—which runs MyAdvo, a platform that connects consumers with lawyers—raised an undisclosed amount in angel funding led by Pradyumna Dalmia, co-founder of Calcutta Angels Network, through LetsVenture, a funding platform.
In July 2016, on-demand legal services provider HiGrit Services Pvt. Ltd raised an undisclosed amount in seed funding from two Chandigarh-based investors.
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