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Bizongo’s scale doubles to Rs 167 Cr in FY23; loss nears Rs 300 Cr

EntrackrEntrackr · 1y ago
Bizongo’s scale doubles to Rs 167 Cr in FY23; loss nears Rs 300 Cr
Medial

Ecommerce-focused packaging company Bizongo has managed to double its revenue during FY23. The growth, however, came at a cost which is evident from its losses which jumped 2.7X during the said period. Bizongo’s revenue from operations grew 98.6% to Rs 166.86 crore during the fiscal year ending March 2023 as compared with Rs 84 crore in FY22, as per the company’s consolidated financial statements with the Registrar of Companies. Founded in 2015, Bizongo offers digital vendor management, supply chain automation & supply chain financing as key services to its enterprise customers. The platform serves 450-500 enterprise customers in fashion & lifestyle, pharmaceuticals, consumer discretionary, consumer staples et al. Bizongo also provides unsecured financing to vendors and according to the company it has tied up with more than 40 banks and non-bank financial companies for loan disbursement. Co-founded by Sachin Agarwal, Ankit Deb, and Ankit Tomar, the company made 96% of its revenue via service fees whereas the remaining part came from design income and platform fees. It also made around Rs 18.15 crore via interest and gains on financial assets during the year which took its topline to Rs 185 crore at the end of FY23. Bizongo spent 32% of its expenses on finance costs which largely include interest on bill discounting, interest on working capital demand loans, and interest on debentures. This cost ballooned 3.9X to Rs 151.95 crore during FY23 from Rs 38.8 crore in FY22. Employee benefit costs went up 79.4% to Rs 113.23 crore in FY23. This cost also includes ESOP expenses worth Rs 27.12 crore. The company also booked allowance for expected credit loss worth Rs 124 crore during the year. The company’s overall expenditure surged 97.1% to Rs 476.6 crore in FY23 from Rs 241.8 crore in FY22. Head to TheKredible for a complete expense breakdown and year-on-year financial performance of the company. Amid cash burn, the company’s losses spiked 173.1% to Rs 291.57 crore during FY23 as compared to Rs 106.76 crore in FY22. Its operating cash outflows, however, improved by 29.6% to Rs 646.3 crore during the last fiscal year. The EBITDA margin and ROCE of the company stood at -73.06% and -27.60%, respectively, during the year. On a unit level, Bizongo spent Rs 2.86 to earn a rupee of operating revenue in FY23. FY22-FY23 FY22 FY23 EBITDA Margin -46.45% -73.06% Expense/Rupee of ops revenue ₹2.88 ₹2.86 ROCE -9.52% -27.60% As per the startup intelligence platform TheKredible, Bizongo has raised over $260 million to date. In October last year, it raised $50 million in a Series E funding round led by existing investor Schroder Adveq. The Tiger Global-backed company was also in the news for its acquisition of Titan Capital-backed FactoryPlus, a factory digitization app for micro, small, and medium enterprises (MSMEs), in November last year. Bizongo’s high provisions for credit loss indicate a cash-burning strategy to sort out the good, credit-worthy vendors from the bad, or worse, operational deficiencies that the firm must get a grip on to ensure its long-term survival. It remains in a promising segment to build a business at scale, but throwing money at the challenge to build a business is certainly not the answer. That investors have backed it as recently as last year indicates the possibilities they see for the firm to make a salutary impact on its segment, but we believe the time to show growth with improving margins is here.

Morgan Stanley-backed Recykal’s scale dips in FY24; losses spike 31%

EntrackrEntrackr · 4m ago
Morgan Stanley-backed Recykal’s scale dips in FY24; losses spike 31%
Medial

Morgan Stanley-backed Recykal’s scale dips in FY24; losses spike 31% While Recykal, a B2B waste management marketplace, achieved 4X year-on-year growth in FY23, the firm could not maintain the same momentum in FY24, with its gross revenue declining by nearly 5%. Moreover, the company’s losses spiked 31% in the same period. Recykal’s gross revenue declined by 4.4% to Rs 712 crore in FY24 from Rs 745 crore in FY23, its consolidated financial statements sourced from the Registrar of Companies show. Founded in 2016, Recykal offers digital solutions for waste management, assisting businesses in meeting EPR targets, sourcing recyclables, and tracking industrial waste. Its services include EPR certificates, plastic neutrality, ITAD, a digital marketplace, and circularity solutions. Gross collections from scrap and waste sales contributed 85% of the gross revenue, which declined 7.4% year-on-year to Rs 608 crore in FY24 from Rs 657 crore in FY23. The remaining revenue was generated from the sale of sustainability services, including EPR certificates. Recykal also added Rs 6 crore interest on deposits and gain on the sale of current investments which tallied the overall income to Rs 718 crore in the last fiscal year, from Rs 748 crore in FY23. For the waste management firm, scrap and waste procurement remained the largest cost center, making up 89.5% of total expenses. With a slight decline in scale, this cost decreased by 3.6% to Rs 673 crore in FY24. Employee benefits surged by 43.3% to Rs 43 crore in FY24, including Rs 3.2 crore in ESOP costs (non-cash). Provisions for doubtful debts, legal expenses, rent, communication, logistics, and other overheads drove total expenditure to Rs 752 crore in FY24. The decline in scale led Recykal to record a 30.8% increase in losses, standing at Rs 34 crore in FY24, up from Rs 26 crore in FY23. Its Return on Capital Employed (ROCE) stood at -15.66%, while its EBITDA margin was -4.04%, with an expense-to-revenue ratio of Rs 1.06. By the end of FY24, Recykal reported total current assets of Rs 317 crore, including Rs 70 crore in cash and bank balances. Recykal has raised over $38 million to date including its $13 million round led by 360 ONE Asset Management. According to the startup data intelligence platform TheKredible, Morgan Stanley is the largest external stakeholder followed by 360 One Asset Management.

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