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Exclusive: Pagarbook turns cashflow positive amid steep valuation drop

Entrackr · 4m ago

Medial

Exclusive: Pagarbook turns cashflow positive amid steep valuation drop Pagarbook is raising Rs 10 crore (approximately $1.2 million) in its Series A5 round from Peak XV Partners, at a valuation of Rs 163 crore — representing an 85% drop from its previous funding round. In the current funding environment, survival has become the top priority for startups — even if it means raising capital at a steep discount. This appears to be the case for Pratilipi, which recently raised fresh funds at a valuation more than two-thirds lower than before. Similarly, Pagarbook is raising a small round, accepting an 85% drop in its valuation to stay afloat. Importantly, the firm has also turned cashflow positive as of March 2025, signaling a shift toward sustainable growth alongside the valuation cut. The board at Pagarbook passed a special resolution to issue 1,826 Series A5 CCCPS at an issue price of Rs 54,764.5 to raise the aforementioned sum, according to its recent regulatory filing reviewed by Entrackr. Pagarbook plans to use the fresh capital to support its expansion and growth, as per filings. Entrackr estimates that the company’s valuation has dropped by approximately 85%, from Rs 1,084 crore ($127 million) in its Series A4 round to Rs 163 crore ($19 million) in this round. The round appears to be ongoing, and the Bengaluru-based company is likely to raise additional capital as part of its Series A5 round. Founded in 2019, PagarBook is a staff management platform that helps SMEs streamline HR processes by simplifying attendance tracking, speeding up payment cycles, reducing disputes, eliminating human errors in wage calculations, and facilitating salary payments — all through its flagship workforce management app. It pivoted in 2022 from financial service to software as a service solution provider for Indian SMEs. According to co-founder Rupesh Mishra, Pagarbook currently has an average revenue run rate (ARR) of Rs 60 crore. “We turned cash flow positive in March 2025,” he said. As per the startup data intelligence platform TheKredible, Pagarbook has raised nearly $22 million to date. Following the allotment, Peak XV Partners will have a 21.62% stake in the company. For the fiscal year ending March 2024, the Bengaluru-based company reported an operating revenue of Rs 13 crore and a loss of Rs 70.4 crore, which includes an exceptional item expense of Rs 36.4 crore. Looking at the numbers, two things are obvious. One, that Pagarbook has struggled in the quicksand that is monetising from the Indian SME sector. The sector, for all its numbers in the millions, remains hopelessly disorganised, and plagued by off book transactions. Two, in the course of its struggles and the burn down of an impressive amount of funding, Pagarbook might have discovered something of value or promise to manage a little more funding to test that thesis. It is not the first, or the last firm where this has happened. When you back a bunch of smart people on breaking open an opportunity, even if they fail, they will usually come out with valuable learnings, and sometimes, a different opportunity. Disclaimer: Bareback Media has recently raised funding from a group of investors. Some of the investors may directly or indirectly be involved in a competing business or might be associated with other companies we might write about. This shall, however, not influence our reporting or coverage in any manner whatsoever.