After being convinced by his father’s suggestion that he should do something else other than getting into a government job like him, Kapil Goyal opted for commerce even though he had top scores in science and mathematics. He cleared CA at first shot in 1998 and began practicing. But soon he discovered that the world somehow was governed by other factors than sheer talent.
“I did have some clients. But after two years I got disillusioned. It was not possible for me to tweak the rule book and do the way the clients wanted. That’s when I looked for diversification and started working for banks and financial institutions as an investigator. But that’s just for surviving while my heart lay elsewhere,” says Kapil, CEO and founder of KDK Software.
One day, he was attending an event of CAs and came across a hoarding on software for return filing. He was intrigued by that hoarding.
“Since I was good at science and math, I had a fascination for computers and software. Next day, I made a feasibility analysis of making a software and selling it to CAs. The excel sheet results encouraged me. I worked on the project though I later found that the excel analysis painted a rosy picture. By then I was already into making the software,” said Goyal.
The fact that the government introduced online as an option for return filing in 2006 came as a hope. But KDK Software had to wait for some years to reach the milestone it was searching for. In 2010, when The Institute of Chartered Accountants of India (ICAI) decided to empower its small and medium CAs with software, it decided on KDK’s software.
“The apex body ICAI came up with an idea to enable small and medium CAs because they didn’t have money to invest in technology. Our software was enlisted and endorsed for the whole country. As per the deal, the first two years are free. That took our product to the wider national market,” says Goyal, adding that today KDK is one of the top three companies in the country and controls 14% of the share in the return filing and tax compliance software market.
A defining twist came in 2014 for KDK Software. It was acquired by US multinational Intuit, an accounting software provider with 98% market share. KDK became a 100% subsidiary of Intuit with Kapil running the business as head of the unit but as an employee of the global company. “The idea for going with Intuit was that I was the only director of KDK. I thought the company should not be dependent on one person. As per the deal, I used to head the unit,” says Goyal.After running the unit for one-and-a-half years, suddenly the US company announced India as an experimental market. It meant they would downsize the operations here. Kapil suddenly felt that KDK might face an uncertain future. One day, one of the top officials of Intuit suggested to him if he would be interested in buying back the company. Goyal was in a fix.
“I told them to give me a month to decide. I went to a consultant and sought his advice. He weighed in the merits and demerits. In the meantime, I searched on the net on such deals, but did not come across any instance of buying back the whole company,” recalls Kapil.
But he agreed to the proposal thinking that the fate of so many employees was tied to the deal. More than that it was his own baby. “I agreed to buy back the company. In the two-and-a-half years, Intuit had scrapped some businesses of KDK as it did not align to their global vision and tweaked many services. Despite the changes, I bought it back and restarted many services they had closed,” says Goyal.
It was more of a moral and emotional decision that he took consciously. Financially, the deal was not rewarding.
When GST came in 2017, he thought it would give a good boost to business. Several changes to the software platform and sketchy rollout delayed that windfall. The CAs remained as the major market for his software, not the individual companies that he was expecting earlier.“Only 5% of the returns are filed by individuals. 95% is by CAs. But the current trend is looking good because the GST has stabilized now. People would prefer the software to file their returns instead of CAs doing it. I think CAs will remain as advisors only and will come into the picture if there are legal issues. That will expand our market,” says Kapil.
With about 27,000 clients, KDK sees individual segments of the market expand rapidly from here. But he is now focusing on another venture where companies can reduce their working capital needs. The fintech firm, focused on accounting receivables, will create a buyer profiling enabling firms to get payments on time.
Kapil says throughout this journey his wife Sangeeta has stood behind him like a rock.
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