SUMMARY
The Strong Financial Results Have Coincided With The Company’s Recent $6.2 Mn Fundraise
Ahmedabad-headquartered ecommerce major Infibeam has reported a 108% YoY growth in revenue to $33.4 Mn (INR 2,135) Mn in Q3 FY18. As per its recent BSE filings, the company’s profit after tax (PAT) also increased by 146% year-on-year to $4.8 Mn (INR 308 Mn).
The jump in its financials has come on the back of strong growth of the Infibeam Web Services (IWS) segment led by increased transaction volume and digital services growth, the company stated in its earning report for the quarter ending in December 2017.
In line with this growth, revenues from IWS jumped by 252% YoY from $22.1 Mn (INR 1,415 Mn) clocked in Q3 FY17, while IWS EBITDA soared by 162% to $9.8 Mn (INR 631 Mn) in the third quarter of the current fiscal.
The revenue contribution from the IWS segment surged to 66% from 39% in the corresponding period last fiscal year.
Commenting on the Q3 performance, Vishal Mehta, Managing Director at Infibeam, said, “The transaction-based revenue model that contributes to service revenues is a scalable model which is helping the company earn on every transaction executed on the platform. This is an increasing function of the growth in digital transactions.”
“We will focus on growing transaction services domestically and internationally to benefit from the growing trend of ecommerce. I am excited about the opportunity in GeM as well as Bill Payments space in India, where BillAvenue is making a strong headway. We will continue our journey of enhancing our merchant and their customers’ experience by building a strong and scalable all-in-one web based online store solution,” Mehta added.
The development comes at a time when the ecommerce platform has raised $6.2 Mn (INR 40 Cr) funding from Network 18 by issuing preference shares in form of fully convertible warrants via its subsidiary TV18 Broadcast Ltd.
As per its regulatory filings dated February 14, 2018, the preferential shares were issued at a conversion price of $3 (INR 186.91) per equity share.
Highlights Of Infibeam Q3 FY18 Financial Results
According to the company’s BSE filings, transactions processed on Infibeam’s digital platform grew to $847.5 Mn (INR 5414 Cr) in Q3 of FY18, while the number of transactions processed stood at 23.5 Mn.
Additionally, the ecommerce platform saw a 35% YoY increase in the number of registered merchants to 89,993 as of December 31, 2017.
During the third quarter of FY18, the Infibeam Web Services segment, comprising subscription and transaction revenue model, witnessed sizeable growth, due to a large number of transactions flowing through digital platform generating higher transaction revenue.
As stated by the company, the main drivers of its transaction-based growth have been government contracts, large brands and retailers, marketplace and payments platform, among other things.
Infibeam’s service revenue from transaction-led services accounted for a majority of the total IWS revenue, with the rest being subscription revenue.
As part of merchant acquisition strategy, the ecommerce company has also been trying to manage costs without incurring higher operating expenditure. The low-cost operations model, according to Mehta, has resulted in higher EBITDA.
Furthermore, Infibeam has been aggressively pushing for international expansion by partnering with companies across the globe. As part of its international expansion strategy, the company has entered into agreement with a number of aggregators to establish its business in potential geographies like the Middle East and Europe.
According to its earning report, Infibeam’s multichannel and multi-category online retail platform, Infibeam.com, registered revenue of $11.2 Mn (INR 720 Mn) in Q3 FY18. By the end of the third quarter of the current fiscal, the company had 8.09 Mn active users on its ecommerce platform.
The asset-light, low inventory model further helped Infibeam lower its operational costs and cash burn, while also boosting profits, claimed Mehta.
As per the filings, Infibeam has appointed Vishwas Patel and Piyush Kumar Sinha as the newest members of its board of directors. The new appointments were approved by the board in the meeting held on February 18, 2018.
A Look At What Infibeam Has Been Up To
Founded in 2007 by Vishal Mehta, Neeru Sharma, Vijay Subramanian and Ajay Chandra, Infibeam’s business can be divided into two parts – the ecommerce website Infibeam.com and services business BuildaBazaar (BaB) that provides customisable digital solutions and other value-added services to enable merchants to set up online storefronts.
In October 2015, Infibeam Incorporation became the first ecommerce company in the country to be listed with SEBI (Securities and Exchange Board of India), after getting an approval to raise $69 Mn (INR 450 Cr) through an initial public offering (IPO).
As part of the company’s IPO in April 2016, Mumbai-based venture capital firm, Next Orbit Ventures pumped $17.2 Mn to acquire a 5% stake in Infibeam.
In February 2017, Infibeam acquired payments aggregator CCAvenue (now known as AvenuesIndia). Later, it invested $22.4 Mn for further acquiring 7.5% equity shares of CCAvenue. At the time, Infibeam signed an MOU to merge the fintech company into its own operations. Prior to this, in In May 2016, Infibeam had invested about $6.7 Mn (INR 45 Cr) in CCAvenue.
Over the last one year, CCAvenue launched BiIIAvenue, an interoperable digital bill payments platform. Built over the Bharat Bill Payment System (BBPS) infrastructure, BillAvenue enables service providers to accept bill payments from customers nationwide, and also offers easy accessible bill payment facility to customers, both online and offline.
Since its launch, BillAvenue has on-boarded 52 agent institutions and around 300K agents for processing transactions.
In March last year, Infibeam signed a Memorandum of Understanding (MOU) to acquire DRC Systems Pvt Ltd, through its wholly-owned subsidiary NSI Infinium Global Pvt Ltd. Later in May, it was reported that Infibeam Incorporation, along with CCAvenue was looking to invest $466K (around INR 3 Cr) in fintech startup, RemitGuru.
In the month of July, Infibeam and fintech startup Intellect Design Arena were awarded a five-year contract to manage a government emarketplace (GeM).
So far, around 20 states, including union territories, have signed MoUs with the centre to integrate GeM as of end of Q3 FY18.
Most recently, in November 2017, the ecommerce company received an in-principle nod from the RBI to launch B2B payment services through the CCAvenue platform.
While most consumer Internet companies in India are struggling to become sustainable, and burning loads of cash in the process, Infibeam seems to be on the right track, having adopted smart cost-cutting measures and a tech-enabled scalable model that have in turn allowed it to clock profits in Q3 FY18.
With an additional $6.2 Mn funding from Network 18, how the ecommerce firm performs in the upcoming quarter of the current fiscal remains to be seen.
