[What The Financials] Perfios Back In The Red In FY20 Despite 78% Revenue Jump

After a profitable 2019, Bengaluru-based fintech startup Perfios has dropped down into the red for FY20, with INR 26.88 Cr in losses. The company’s expenses for the financial year 2020 grew by 2.6x from INR 39.7 Cr to INR 104 Cr in the same time frame.

In this process, the company has also nearly doubled its revenues from INR 43.59 Cr to INR 77.59 Cr, representing a growth of nearly 78%. A bulk of the revenue came from operations, which also grew similarly from INR 43 Cr to INR 74 Cr in FY2020.

Besides this, the company made nearly INR 3.5 Cr from other sources, including interest on fixed deposits, interest on income tax refund, net gains on sales of mutual funds investment and miscellaneous income. In FY 2019, the company had earned INR 51 Lakh from such other sources. The company’s financial statement also highlighted that it earned INR 3.43 Cr from the export of services, nothing a major spike from the INR 7.75 Cr registered previous quarter.

As far as Perfios’ revenue from operations are concerned, the company had nearly doubled its income from sales of services from INR 34.96 Cr to INR 65.24 Cr in FY202020. The company has earned INR 8.55 Cr from software support for loan processing, noting a slight increase from INR 7.83 Cr earned the previous financial year.

Other sources of operational revenues were subscription fee, financial wellness programme and customisations.

Employees Remain Top Expense For Perfios

Almost 68% of the Perfios’ expenses were directed towards employee benefits. Compared to FY2019, the company spent nearly 3x on employee benefits from INR 23.51 Cr to INR 70.51 Cr in FY2020. Of this, a major chunk went into salaries and wages as the company paid INR 36.67 Cr in FY2020 versus INR 20 Cr in FY2019.

Besides this, the company has contributed INR 2.38 Cr in provident and other funds in FY2020, compared to INR 86 Lakhs in FY2019. It also spent nearly 1.95 Cr and INR 1.08 Cr in staff welfare expenses in FY2020 and FY2019, respectively.

This year, however, Perfios decided to give its employee bonuses worth INR 29.51 Cr in lieu of employee stock option, which led to another INR 1.18 Lakh expense.

Perfios also spends nearly INR 31.5 Cr as “other expense”, which includes power and fuel, rent, repair and maintenance, insurance, software subscription charges, provisions for doubtful debts and net loss on foreign currency transactions and translations. The cost also includes INR 12.34 Cr spend on legal and professional changes, INR 3.79 Cr spend on marketing, INR 2.94 Cr conference charges, and INR 2.51 Cr cloud hosting charges.

Notably, the company’s marketing spends had substantially grown from INR 24 Lakh in FY2019 to INR 3.79 Cr in FY2020. According to the company’s financial statements, it spent nearly INR 3.53 Cr as marketing fees in foreign currency in FY2020, which is a new expense for the company.

Perfios Fundraising, Acquisitions For FY2020

Founded in 2009 by V R Govindarajan and Debasish Chakraborty, Perfios is a credit decisioning and analytics company which operates in both B2B and B2C segments. The platform enables financial institutions in real time decisioning, analysis and credit underwriting, which helps lenders evaluate a loan application in a better manner.

Additionally, the company provides services such as banks statement analysis, e-verification, financial analysis, fraud check, among other financial services. The company claims to have partnered with nearly 200 banks, non-banking financial companies (NBFC) and fintech startups.

Perfios has raised $56.1 Mn across two funding rounds. It had last raised $50 Mn Series B from Warburg Pincus and its existing investor Bessemer Venture Partners in November 2019. According to Perfios’ financial statements, it had allotted 40,704 equity shares of INR 10 at a premium of INR 1,267 per share and 3,27,399 Series B CCPS of INR 10 at a premium of INR 3,990 in FY2020.

Besides this, the company had also acquired Noida-based fintech startup FinTechLabs, which provides digital lending management software to banks, NBFCs, digital lenders and other financial institutions globally. The acquisition was completed in November 2019.