“Deepak Dhamija talking about the idea behind Aristotle Consultancy and how its helping startups manage finance and accounts, published in ET Wealth titled – Handling Startup’ Finances”
Featured – The Economic Times Wealth
Managing finance functions is one of the major pain points of startups— given shoestring budgets that do not allow for the services of a proper CFO. In addressing this problem, Deepak Dhamija found an opportunity to build his own business. In 2010, this former investment banker, along with Sanjeev Lamba, his brother-in-law, and Aniketh Kumar, Lamba’s colleague, founded Aristotle Consultancy to meet finance, accounting and compliance needs of startups and SMEs.
Dhamija, 33, who was working with a startup-focused venture capital fund, realised that entrepreneurs were constantly grappling with financial and legal issues. “It was quite expensive to create in-house teams for such solutions and the local CAs were not familiar with the processes and the problems faced by entrepreneurs,” says Dhamija. As a result, entrepreneurs, instead of focusing on the core operations of their business, were wasting a lot of their time handling financial or regulatory issues.
“There was an immediate need for process-oriented accounting service providers in the market. And we decided to become the outsourced finance department of startups,” says Dhamija. The founders, who invested `3 lakh to seed their venture, found the initial phase quite trying. Gaining entrepreneurs’ trust was among their biggest challenge. Also, a large number of the newly-founded companies, in their eagerness to grow fast—and, in some cases, to avoid tax—weren’t following the due financial processes. “It was quite difficult to convince them about the benefits of following the right process and executing the same without losing the agility in decision making,” says Dhamija. The founders spent a considerable time understanding their potential clients’ businesses and, thus, managed to gain their trust. This intricate involvement with the clients has helped the startup gain the trust of as many as 40 companies. Its client list includes some of the biggest startups including, among others, Jabong, Fab-Farnish, FoodPanda, IndiaMart and GoJavas.
Aristotle Consultancy’s 2011-12 revenue stood at Rs 1.1 crore. The company has seen a steady rise in its turnover clocking Rs 4 crore in 2014-15. Its staff strength has increased from 20 to 80 even as one of the co-founders, Kumar, is no longer with the company. The startup is now looking to accelerate growth. “We are mulling raising funds now to develop our in-house technology and to expand aggressively in other markets,” says Dhamija. The startup, which offers services to some international clients as well, recently entered Bengaluru and Chennai.
Dhamija says that even though there are others offering virtual CFO services, the extent of his company’s involvement, which goes beyond just the advisory role, sets it apart. “Our long-term vision is to provide high-quality accounting services for startups and SMEs across the country,” says Dhamija. The company’s short-term goal is to replicate its Delhi success in the Bengaluru and Chennai markets.