IPO-Bound PayMate’s FY22 Net Loss Jumps Over 2X YoY To INR 57.7 Cr

IPO-bound B2B payments solutions provider PayMate’s consolidated net loss more than doubled on a year-on-year (YoY) basis to INR 57.7 Cr in the financial year 2021-22 (FY22), hurt by a sharp rise in expenses.

The company had reported a net loss of INR 28.1 Cr in FY21.

PayMate’s operating revenue jumped 3.4X to INR 1,208.8 Cr in FY22 from INR 348.4 Cr in the previous fiscal year. 

As a payment solutions provider for enterprises and SMEs across supply chains, PayMate earns a majority of revenue from sale of services. It recognises revenue when it transfers control over a product or service to the customer. 

Including other non-operating income and interest income, PayMate’s total revenue in FY22 stood at INR 1,209.2 Cr as against INR 239 Cr in the previous year.

Founded in 2006 by Ajay Adiseshann, PayMate works with banks to offer credit services to SMEs and enterprises. It also helps them automate and digitise their procurement to payment cycle (procure-to-pay). Its product features include vendor payments, vendor management, customer payments, supply chain financing options, and more.

On the expenses front, PayMate spent a total of INR 1,266.9 Cr in FY22, up 3.3X from INR 377.1 Cr in FY21. 

Cost of services comprised over 95% of the company’s total expenses. PayMate spent INR 1,207.5 Cr towards cost of services in FY22 as against INR 348.5 Cr in FY21.

As per its filings, PayMate’s cost of services during the year comprised bank transaction fees and payment gateway fees.

In a statement to Inc42, PayMate said the cost of services increased due to the rise in business volumes, in line with revenue.

Besides, PayMate also saw a 2.2X rise in its employee benefit expenses to INR 49.7 Cr in FY22 from INR 22.4 Cr in the prior fiscal year. In that, it spent INR 24.2 Cr on salaries and wages, a rise of over 110% YoY.

Miscellaneous expenses, including provision for bad and doubtful debts, office expenses, and IT expenses, jumped to INR 3.4 Cr in FY22 from INR 1.4 Cr in FY21.

The startup said that the increase in total expenses during FY22, excluding cost of services, was mainly on account of the global expansion and it expects to see returns on it in the coming years.

In May 2022, PayMate filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board (SEBI) to raise INR 1,500 Cr via its initial public offering (IPO). 

However, earlier this year, SEBI asked PayMate to refile its DRHP with additional updates. As per a report last month, PayMate is likely to refile its DRHP in the next 90 days. 

However, the startup, in the statement, said, “PayMate is likely to refile its DRHP in the near future subject to regulatory processes and market conditions.”

Meanwhile, in December last year, PayMate also received ‘in-principle’ approval from the Reserve Bank of India (RBI) to operate as a payment aggregator.

Note: The article has been updated to include PayMate’s statement