[Update] Info Edge Writes Off Entire Investment In Sequoia-Backed Bijnis

Breaking: Info Edge Writes Off Entire Investment In Sequoia, Tiger-Backed Bijnis

SUMMARY

Info Edge said it wrote off its entire investment of INR 76.6 Cr in Bizcrum infotech Private Ltd, the parent entity of Bijnis, in Q4 FY23

Citing factors such as continuing cash burn, limited availability of cash in proportion, and uncertainty of future capital raise, Info Edge said the investment has lost its entire value

Bijnis reported a 2.9X jump in its net loss to INR 54.5 Cr in FY22 from INR 18.3 Cr in FY21

Info Edge has written off its entire investment worth INR 76.6 Cr in New Delhi-based B2B marketplace Bijnis, as per the online classifieds major’s earnings statement for the quarter and year ended March 2023.

Info Edge said it wrote off its entire investment in Bizcrum Infotech Private Ltd, the parent entity of Bijnis, after due consideration of factors including continuing cash burn, limited availability of cash in proportion to unspecified liabilities with respect to buyback obligations (including liquidation preference) of the company towards investors and uncertainty of future capital raise.

Info Edge said that due to these factors, the company’s management believes that the investment has lost its inherent value.

This is the second such write off by the company, which was an early investor in the likes of Zomato and PB Fintech, in FY23. Last quarter, it wrote off INR 276 Cr of investment in Rahul Yadav’s 4B Networks.

In Q3 FY23, the company said that its investment of INR 519.9 Cr in 4B Networks was impaired. It added another INR 12.3 Cr in Q4 FY23, taking the total amount of investment in the proptech startup which has been impaired to INR 532.2 Cr in FY23.

The write off of investment in Bijnis comes 18 months after the startup raised $30 Mn in its Series B funding round, led by WestBridge Capital.

The funding round also saw participation from marquee investors such as Matrix Partners India, Sequoia Capital India, Waterbridge Ventures and Info Edge.

The startup also counts Zomato founder Deepinder Goyal, OfBusiness founder Asish Mohapatra, and Oxyzo’s cofounder Ruchi Kalra among its backers.

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According to Bizcrum Infotech’s annual return, Info Edge, through its wholly owned subsidiary Startup Investment (Holding) Ltd, owns 100 equity shares in Bijnis.

Earlier in July 2020, Bijnis bagged $10 Mn in its Series A round led by Sequoia Capital and Matrix Partners.

Founded in 2014 by Chaitanya Rathi, Shubham Agarwal, Siddharth Rastogi, Siddharth Vij, Bijnis connects manufacturers and retailers in the fashion, lifestyle and other categories and also offers third-party payments and logistics solutions. The startup competes against the likes of IndiaMart, Udaan, Geniemode, Fashinza, among others.

Bijnis reported a 2.9X jump in its net loss to INR 54.5 Cr in FY22 from INR 18.3 Cr in FY21. Revenue from operations rose 1.5X to INR 25.1 Cr in FY22 from INR 15.9 Cr in FY21, while expenses soared over 2.4X to INR 88.9 Cr from INR 35.7 Cr in FY21.

Employee benefit expenses accounted for the biggest chunk of the startup’s expenses. In FY22, Bijnis spent INR 44.5 Cr on employee wages as compared to INR 12.7 Cr in FY21. Apart from this, it spent INR 25.5 Cr on freight cost, a 1.8X jump from 13.6 Cr in FY21.

After Inc42 reported about the write-off, Info Edge has now issued a statement on its reasoning:

“This is to clarify that the write-off taken in Bicrum Infotech Pvt Ltd [Bijnis] is a technical write-off due to the unspecified liabilities on Bizcrum which may materialise owing to the buyback obligations in the existing shareholders’ agreement signed between the company and the investors. This liability is contingent in nature and has been factored in based on the conservative accounting policies followed by the company in compliance with IndAS accounting standards. Therefore, this is not a reflection on the company’s financial performance, the market opportunity and the value proposition,” Rishabh Katiyar, part of the investment team as Principal at Info Edge Ventures, told Inc42 in a statement.

“Further, this liability would only materialize if the company is unable to provide an exit to the key investors via other exit mechanisms like third party sale, listing, among other mechanisms captured in the agreements by a specified date in future and all the key shareholders together choose to exercise the buyback right as an exit mechanism,’’ he added.

Echoing similar sentiment, Bijnis cofounder Siddharth Vij said that the write off is a technical issue due to the buyback clause in the shareholders agreement and it is not a reflection on the financial performance or growth prospects of the startup.

“We continue to hold the most precious relationship with Info Edge, our first institutional investor who has backed us since our early years and continues to keep strong faith in team bijnis and the massive opportunity that lies ahead of us,” Vij said in a LinkedIn post

Inc42 has reached out to other investors of the company to get their view on the state of operations of Bijnis. We will update this story or report this separately depending on when we get responses.