Small, Medium, XL

How Power2SME leveraged the power of small and medium enterprises by growing seven-fold in four years and is within striking distance of ₹1,000 crore in revenue. The next target: 5,000 crore by 2021

- Rajiv Singh

It was a double whammy for R Narayan. What heightened the pain was the timing of the second blow—the Goods and Service Tax, or GST—just seven months after demonetisation in November 2016. Though the twin unprecedented fiscal steps—demonetisation and GST—did a world of good in formalising and streamlining the highly fragmented SME sector, the initial impact was something which neither the CEO of Power2SME nor the segment he was catering to was prepared for. “If demonetisation was a Black Swan event, GST was a big elephant in the room that nobody could figure out. Small and medium enterprises (SMEs) were in a state of disarray,” recounts Narayan, also the founder of the online marketplace for SMEs.

“Both badly hit collection of dues from the SMEs,” Narayan adds, pointing out how the business, which was largely based on credit, went into a tailspin. Before demonetisation, he says, the collection period hovered around 27 days. “It jumped to 71 days post demonetisation. And, initially after GST, production cycles went for a toss,” he rues. For a company that had posted an over-12-fold revenue growth since the March ended fiscal 2014, to touch 796.8 crore three years later, it seemed that the worst was around the corner.

It wasn’t.