Info Edge Investments Grow 2.29X In Six Years, Writes Off INR 299 Cr Investments

Being an active backer of Indian startups for over a decade, Noida-headquartered Info Edge has been creating unicorns and soonicorns in the Indian startup ecosystem. With founder Sanjeev Bikhchandani at the helm, the company has bet on success stories like foodtech unicorn Zomato, insuretech unicorn PolicyBazaar, edtech startup Adda247, digital ledger platform Khatabook among others.

In an investor presentation for results of Q4 FY20, Info Edge said that its investments have grown from INR 336 Cr in FY14 to crossing over INR 1,000 Cr in FY19 with INR 1,037 Cr in the year and INR 1,108 Cr in FY20.

However, amid Covid-19 and the ensuing lockdowns, the company’s investments had a significant impact on the operations. Despite this impact, the company has said that it sees growth opportunities through investments in technology-oriented and innovation-oriented startups.

Info Edge had announced in January that it has launched an INR 100 Cr IE Venture Fund. The alternative investment fund will invest in tech and tech-enabled startups that create, market and distribute innovative products and services that benefit consumers at large, it said. Its investments from the fund include Dotpe Pvt Ltd (INR 10.4 Cr), Qyuki Digital Media Pvt Ltd (INR 25.2 Cr), Intellihealth Solutions Pvt Ltd (INR. 3.7 Cr), Fanbuff Esports India Pvt Ltd (INR 3.5 Cr).

It had also proposed to set up a INR 750 Cr ($100 Mn) fund. Info Edge along with its wholly-owned subsidiaries in their capacity as LP committed INR 350 Cr and has already disbursed INR 150 Cr from that till now. The company is also in talks to raise $50 Mn from foreign LPs and has a pipeline of INR 85 Cr in non-binding signed term sheets.

Overall the company has 21 active investments worth INR 1108 Cr at the end of FY20. 

Further, it has also written off/provisioned investments in Studyplaces, 99Labels, Nogle Technologies, Canvera Digital, Kinobeo Software Pvt. Ltd. (Mydala), Green Leaves Consumer Services (Bigstylist), Rare Media Co., Vcare Technologies ( Diro Labs) and Mint Bird Tech. (Vacationlabs), Applect Learning (Meritnation). The company said that the total amount written off is INR 299.4 Cr.

Talking about the impact of Covid-19 on the portfolio, Hitesh Oberoi, co-promoter, MD, CEO and Director, Info Edge (India) Limited said that ShopKirana and Gramophone had a temporary dislocation but have bounced back. “Zomato has faced disruption, but it’s now bouncing back on the top line and has also reduced its burn considerably. It has sufficient money and has some inbound investor interest as well,” he added.

For PolicyBazaar, Oberoi said that the company continues to benefit from the growing digital penetration. This is also helping them to improve the overall profitability of the business. However, its subsidiary, PaisaBazaar has been impacted by moratorium extensions and is exploring expanding the business into non-lending categories. “They have reduced their headcount substantially to meet their profitability targets for the year,” he added.

The company also said that it will continue to evaluate new investment opportunities in the light of changes brought in by Covid-19.

Talking about Zomato, one of the major investments and success stories for Info Edge, Sanjeev Bikhchandani, Info Edge (India) Limited – Founder and executive vice-chairman, said that Zomato is focusing on food delivery from restaurants and cloud kitchens. 

“They did do groceries for a while, and then they stopped after the crisis was over. They were trying to help out. Liquor hasn’t really been done yet. And liquor is tricky business on the policy— it’s a tricky business given the kind of nature of the business, but we’ll deal with that as— should it happen. It’s highly regulated, requires government clearances. It’s got a different kind of distribution and trade,” he added.

Noting that the company took an immediate substantial hit because restaurants were closed, delivery boys didn’t travel, but as restaurants come back, there has been a bit of a bounce-back. He did note that it is still way below what it was in February.

“Having said that, the burn is substantially down and that people are moving to a better unit economics model. Discounts are less. And we are making positive money above — after becoming all variable costs in each quarter…But the companies are hoping next 2, 3, 4 month, every month, it will come back more and more. Of course, if COVID makes a comeback — kind of a strong comeback, then there might be some stop-start. But right now, it’s been coming back steady,” he added.