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WeRize’s revenue zooms 22X in last two fiscal years

EntrackrEntrackr · 1y ago
WeRize’s revenue zooms 22X in last two fiscal years
Medial

British International Investment-backed fintech platform WeRize seems to have found a stable ground across smaller cities and this could be validated from its growth trajectory in the last two fiscal years. The five-year-old firm registered a staggering 22X growth in its operating scale which rose to Rs 68.14 crore in FY23 from Rs 3.2 crore in FY21. When it comes to year-on-year growth, WeRize saw revenue from operations soiling 3.46X to Rs 68.14 crore in the fiscal year ending March 2023 from Rs 19.68 crore in FY22, its consolidated financial statements sourced from the Registrar of Companies shows. Founded by Sachin Chopra and Himanshu Gupta, WeRize provides loans (mortgage and unsecured), group insurance to lower middle class through its own (Wortgage Finance) and third party non-banking financial institutions including Vivitri capital and InCred. Revenue from interest and services fees accounted for 84.85% of the total operating revenue. It earned Rs 33.49 crore from interest while service fee aka loan processing fee brought Rs 24.33 crore to the company’s coffers. WeRize also made Rs 4.63 crore from non-operating activities, pushing its total income to Rs 72.77 crore in FY23. Similar to most of the lending startups, employee benefit expense formed 34.98% of the overall expenditure which increased by 125.9% to Rs 28.3 crore in FY23 from Rs 12.53 in FY22. WeRize’s professional consultancy fees, commission, subscription fees, performance payouts, and other overheads took its overall expenditure up by 153.6% to Rs 80.9 crore in FY23 from Rs 31.9 crore in FY22. Head to Thekredible for detailed expense breakup. Despite a 2.5X surge in expense and increase in revenue, the company managed to cut its losses by 23.8% to Rs 8.23 crore in the last fiscal year. Its ROCE and EBITDA margin also demonstrated improvement significantly to -2% and 2.5% respectively. On a unit level, it spent Rs 1.19 to earn a rupee in FY23. FY22-FY23 FY22 FY23 EBITDA Margin -29% 2.5% Expense/₹ of Op Revenue ₹1.62 ₹1.19 ROCE -13% -2% According to the startup data intelligence platform TheKredible, WeRize secured $15.5 million in funding in June 2022 at a post money valuation of $108 million. Kalaari Capital holds 16.09% in the firm while 3one4 Capital and Orios Venture Capital hold 13.46% and 10.18%, respectively. WeRize looks set to break even in FY24, will it maintain the growth momentum? That is the million dollar question in a market where it will get increasingly crowded as it scales. However, the possibilities in the lower income segment it has thrived in so far remain immense, especially for insurance products where it remains under penetrated. The issue has always been one of selling effectively, and building a strong narrative of use case that attracts more to the platform. WeRize will be well aware of that we are guessing, unless they seek the relative comfort of higher income, but more competitive segments. It’s a tradeoff that will define both its immediate and long term future one feels.

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ProcMart GMV zooms 3X to Rs 621 Cr in FY24; profit slips 56%

EntrackrEntrackr · 10m ago
ProcMart GMV zooms 3X to Rs 621 Cr in FY24; profit slips 56%
Medial

B2B procurement marketplace ProcMart has been growing at a scorching pace over the past two fiscal years, with its gross merchandise value (GMV) spiking 5X in FY23 and FY24 compared to FY22. In FY24, the company achieved 3X GMV growth, but its profit nosedived by 56.5% ProcMart’s gross revenue shot up over 200% to Rs 621.5 crore during the fiscal year ending March 2024 in comparison to Rs 206.07 crore in FY23, the company’s consolidated financial statements sourced from the Registrar of Companies (RoC) show. ProcMart is engaged in the trading business of industrial automation, electrical, mechanical, electronics, IT items, abrasive, fasteners, safety & security items, various tools & consumables. The sale of these products accounted for 98% of the total gross revenue in the last fiscal year. The company also provides business procurement assistance services which formed the remaining part of the GMV during the last fiscal year. Overall, the company generated Rs 624.3 crore in gross revenue including Rs 2.79 crore from interest and gains on financial assets. Moving forward, the cost of materials was found to be the largest burn and formed 93.4% of the total expenses. This cost ballooned 216.3% to Rs 582 crore in FY24. The company spent 3% of its total expenses on employee benefits which stood at Rs 19 crore during the same period. Further, expenses such as transportation, legal & professional, rent et al took over the company’s total cost by 205.6% to Rs 623.4 crore during FY24 from Rs 204 crore in FY23 For the complete expense breakdown, head to TheKredible. Despite accelerating scale, ProcMart barely finished staying in the green. The company’s profits slipped 56.5% to Rs 73 lakh in FY24 against Rs 1.68 crore in FY23. Its operating cash flows however turned positive at Rs 15.81 crore crore during the last fiscal year. FY23-FY24 FY23 FY24 EBITDA Margin 2.28% 1.33% Expense/₹ of Op Revenue ₹0.99 ₹1.00 ROCE 7.33% 5.45% As per TheKredible, the firm’s EBITDA margin and ROCE registered at 1.33% and 5.45%, respectively. On a unit level, ProcMart spent Re 1 to earn a rupee of operating revenue during the previous fiscal year. ProcMar has raised over $40 million in funding to date across three rounds. Its last funding round came in April this year where it raised $30 million funding co-led by Fundamentum and Edelweiss Discovery Fund. As per TheKredible, the company was valued at around Rs 724 crore or $88 million (post-money). The B2B procurement space has been a surprise winner with the storied success of multiple firms. There is however little doubt that margins are thin, prompting changes in the model to contract manufacturing, financing and more by players. ProcMart for now seems to be sticking to the plain vanilla procurement based model. As it scales up, it will be interesting to see if it sticks to the model, or finds its own way into a higher margin revenue stream. Until then, it will know that maintaining a strong growth rate will be the least expected of it.

Purple Style Labs posts Rs 372 Cr revenue in FY23, cuts losses

EntrackrEntrackr · 1y ago
Purple Style Labs posts Rs 372 Cr revenue in FY23, cuts losses
Medial

Purple Style Labs, an omnichannel luxury fashion platform, experienced rapid growth with a revenue increase of over eight-fold in the last two fiscal years. Its revenue from operations reached Rs 372 crore in FY23, compared to Rs 44 crore in FY21. The Mumbai-based company also managed to narrow down its losses significantly in the fiscal year ending March 2023. Purple Style Labs primarily generates revenue from the sale of designer fashion and lifestyle products, with a significant contribution from its UK-based subsidiary. The company's expenses include material procurement, advertising and marketing, employee benefits, and other overheads. Despite the growth, Purple Style Labs still posted losses in FY23.

True Balance’s profit zooms over 2X to Rs 138 Cr in FY24

EntrackrEntrackr · 11m ago
True Balance’s profit zooms over 2X to Rs 138 Cr in FY24
Medial

True Balance, founded by South Korean entrepreneur Cheolwon Lee, started with a mobile and DTH recharge platform. However, the company’s business dynamics changed drastically after FY21 when it started lending (personal or short-term loans). This shift enabled the company to register over 74X growth in its scale in the past five fiscals as its revenue ballooned to Rs 667 crore in FY24 from Rs 8.95 crore in FY19. For context, the SoftBank-backed firm started lending in FY20 through third parties, and a year later it also got its own NBFC —True Balance. On a fiscal to fiscal basis, True Balance’s operating revenue grew 54.8% to Rs 667 crore in FY24 from Rs 431 crore in FY23, its consolidated financial statements sourced from Registrar of Companies show. True Balance’s personal loan platform usually targets borrowers who are neglected by banks and have no credit scores. The service and processing charges on the loans offered contributed 56% of the firm’s total operating revenue. This income spiked 63.2% to Rs 377 crore in FY24 from Rs 231 crore in FY23. Meanwhile, the income from interest stood at Rs 280 crore in FY24. The penalties on dues and non-operating incomes (interest from fixed and current investments) took True Balance’s overall revenue to Rs 673 crore in the fiscal year ending March 2024 from Rs 433 crore in FY23. See TheKredible for the detailed revenue breakup. For the cash loan firm, the bad debts (NPAs) and their provisions formed 36.2% of its overall cost which increased by 26.3% to Rs 202 crore in FY24 from Rs 160 crore in FY23. The fintech firm had written off the bad debts worth over Rs 114 crore while the rest were the provisions related to the bad debts in FY24. The firm’s spending on employee benefits, finance, advertising, information technology, technical, legal, and other overheads took its overall cost up by 51.4% to Rs 557 crore in FY24. Head to TheKredible for the detailed expense breakdown. Over 50% YoY growth helped True Balance to post a 2.3X jump in its net profits to Rs 138 crore in FY24 from Rs 59 crore in FY23. Its ROCE and EBITDA margins improved to 42.24% and 27.64%, respectively. On a unit level, the ten year-old firm spent Rs 0.84 to earn a rupee in FY24. FY23-FY24 FY23 FY24 EBITDA Margin 22.40% 27.64% Expense/₹ of Op Revenue ₹0.85 ₹0.84 ROCE 32.11% 42.24% According to TheKredible, True Balance has raised $140 million across equity and debt rounds including its $28 million led by SoftBank and Daesung Private Equity. The company raised its last round almost three years back. Looking at the numbers, one can’t help but wonder at not just the numbers, but the impressive balancing act True Balance must manage to stay below the radar of regulators and watchdogs including the RBI. With its short tenure, high interest and high processing charges True Balance tries to balance out its high margins with the promise of 24×7 service and higher risk appetite. But as the delinquency numbers indicate, it must be a high intensity gig, balancing out risks versus margins. Even as margins are winning for now, we still believe the risk of sudden regulatory heavy handedness is intrinsic to its otherwise impressive business. It is also at a stage where the other next stage of growth will be fueled by more debt than equity. Considering the large appetite it can be expected to have to maintain its growth momentum, it will be fascinating to see if it has a trick or two for that too up its sleeve.

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