Infibeam Posts 26% Increase In Revenues For Q1 FY2019 Amid Talks To Raise $292 Mn

Ahmedabad-headquartered ecommerce major Infibeam has Infibeam registered a 26% increase in revenues, thereby earning $13 Mn (INR 91.3 Cr) in Q1 FY2019, against $10.3 Mn (INR 721.3 Mn) in Q1 FY 2018.

At the same time, the company recorded a net loss of $1.97 Mn (INR 13.88 Cr) for Q1 FY2019 ended on June 30, 2018.  This is more than 5x of $314K (INR 2.2 Cr) loss in Q4 FY2018. 

To be noted, the company showcased a net profit of INR 127.2 Mn for the corresponding quarter last year (Q1 FY2018). At present, Infibeam is also in talks to expand business in IT segment. It is looking to set up its payments bank and also raise $292 Mn (INR 2000 Cr).

Inc42 earlier reported that Infibeam recorded a 108% YoY growth in revenue to $33.4 Mn (INR 2,135) Mn in Q3 FY18. Also, the company’s profit after tax (PAT) also increased by 146% year-on-year to $4.8 Mn (INR 308 Mn).

Infibeam: Other Key Points From Q1 FY2019 Financials

• Successful Value of Payments Processed: INR 102.45 bn (INR 10,245 crore), up 128% YoY
• Transactions Processed: 27 Mn
• Number of Merchants on the platform in Q1 FY19 >100,000
• Significant increase in number of active merchants on Web Services Platform: 500,000+ (400,000+ in Q4 FY18)
• Government e-Marketplace (GeM) cumulative order value INR 102+ Bn

Loss In Q1 FY19: What May Be The Reasons?

The loss in Q1 FY19 can be attributed to increased company expenses on account of the aggressive growth strategy followed after raking in the Government e-marketplace (GeM) contract in July 2017.

As depicted in the company’s recently released financials for the quarter ending June 2018, Infibeam also spent a significant amount on advertising and promotions in the last quarter as new product launches were on edge.

For instance, Infibeam launched an ad platform on its ‘.OOO’ domain in August 2018. About 85,000 publishers have registered as affiliates to date. It also partnered with Moneycontrol.com to launch Moneycontrol.ooo in Hindi.

Next, Infibeam completed the acquisition of Payments Solutions provider in the Middle East – Vavian International Ltd for AED 4.32 Mn ($1.2 Mn) in June 2018. Earlier in May 2018, Infibeam also acquired Snapdeal’s cloud-based inventory management subsidiary, Unicommerce for $17.8 Mn (INR 120 Cr).

Impact of Government EMarketplace Operations On Infibeam

As Inc42 recently reported, Government e-Marketplace (GeM), a national public procurement platform, will turn two years old tomorrow, claiming over $1.45 Bn (INR 10,000 Cr) in Gross Merchandise Value (GMV) through more than $8.96 K (INR 6.16 Lacs) transactions on the platform.

Overall, the platform is managed by fintech startup Intellect Design Arena and ecommerce major Infibeam. As mentioned by Infibeam in its Q1 FY2019 release, the number of sellers on GeM increased nearly 10x from 1,338 in September 2016 to 132,666 as of June 2018. 

Multiple high-value orders from government executed on the platform and GeM cumulative GMV crossed INR 100 Bn by the end of July 2018.

Road Ahead For Infibeam

Infibeam is at present tapping into the following opportunity:

• The Indian ecommerce market is $40 Bn in 2017 and is projected to be $200 Bn in 2026 growing at a CAGR of 20%.
• There are over 60 Mn MSMEs in India.
• Only 2% of MSMEs are doing active ecommerce.
• Just 32% of SMEs in India were digitally connected in 2017 and 17% used internet for business purposes.

“We expect to achieve strong growth during FY 2019, with the continued growth of the ecommerce industry in India and in the International markets we operate in,” said the company in its financials for Q1 FY2019.

Infibeam further expects a strong growth in FY19 owing to:

• The growth in transaction-based revenue streams including growth in order value on Government e-Marketplace
• The growth in Bill Payments through BBPS and Growth of Payments Solutions business in the Middle East
• Addition of Unicommerce helping it to strengthen its end-to-end offering
• Ability to cross-sell its solutions under web services to existing merchants

As a cloud-based omnichannel ecommerce platform, Infibeam provides end-to-end ecommerce solutions to small and large merchants, enterprises and government.

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 the rare sight of profitability in consumer Internet companies of India, Infibeam has continued to post strong growth. With fundraise and entry into $200 Bn worth digital payments industry, Infibeam continues to showcase a promising endeavour.