Instead of focusing on the large startups which are still bleeding, Rajneesh De of APAC News Network analyzes 10 profitable startups threadbare. While these profitable startups are prima donnas today, what will happen to them in the future? Watch this space at APAC News Network for future developments.
The steady growth of the Indian economy and the spurt in consumer index has given rise to numerous startups or online-native companies over the last decade or so. Some of these companies garnered recognition from consumers and international investors and soon became giants. For some, after the initial euphoria of high valuations and brand equities, they have got mired in controversies. There are a few who have moved silently and are today witnessing profits on their bottomlines.
Trying to analyze Top 10 Indian startups is therefore highly subjective and always mired in debates and counter-arguments. Instead of conducting that exercise, APAC News Network chose to tread slightly off the beaten track. We have embarked on conducting a SWOT analysis of India’s 10 profitable startups and understand their business roadmaps followed till dates.
While this means avoiding the Goliaths among the startups, the APAC News Network exercise is aimed to track those companies creating a profitable niche for themselves. After all, earning profits must be the mantra of all business, whether they are startups or well established enterprises. While these profitable startups can be termed as the prima donnas among Indian startups today, what will happen in the future? Watch this space.
1. Zerodha: Democratizing Stock Investing :
Zerodha is a prominent fintech specializing in online stock broking. It claims low brokerage fees and user-friendly platform as its USPs offering significant discount brokerages for equity, derivatives, and mutual funds. Founded by two brothers Nithin Kamath and Nikhil Kamath in 2010, Zerodha is headquarted in Bengaluru and claims to have over 1 crore active clients, contributing to over 15% of daily retail stock order volumes in India.
The innovations from Zerodha include the GTT (Good Till Triggered) feature that allows users to automatically set buy and sell commands for individual stocks for an year, Nudge feature providing real-time alerts on thr trading platform warning users of risks with a particular trade and Console feature providing in-depth reporting and analytics on trade and investmenrs.
The balance sheets of last few years, as a consequence, naturally vouch for Zerodha’s profitability. In FY20, Zerodha’s profit was Rs 442.36 crore, as reported by Entrackr while it increased significantly to Rs 1,122 crore in FY21 and further jumped by a whopping 86% to Rs 2,094 crore in FY22. It further clocked a profit of Rs 2900 crore in FY23 against a revenue of Rs 6875 crore.
Strengths:
Affordable trading fees, large and growing client base and focus on technological innovations are the three strengths of Zerodha. Anyone can invest in stocks and ETFs through Zerodha paying a flat brokerage fee of Rs 20 per order, regardless of order size. Zerodha holds a marketshare of 19.4% of the entire active NSE clients, further highlighting its dominance. Zerodha’s digital tools and platforms enable both traders and retail investors to take informed decisions. Zerodha’s fintech fund and incubator Rainmatter additionally invests in fintech startups contributing to the growth of India’s capital markets.
Weaknesses:
While technology innovations have been one of Zerodha’s strengths, it has been paradoxically one of its weaknesses too with its trading platform Kite often facing technical glitches and system outages impacting trading experience. The heavy reliance on technology also makes Zerodha vulnerable to cyber threats and potential security breaches. Technology wise, Zerodha still faces challenges in customer support with inordinate delays in responses to tickets and long waits on phone calls. Limited product offerings have been another weakness for Zerodha with no options for trading in commodities, currencies or mutual funds.
Opportunities:
Expansion of asset management, integrating AI with technology and further penetration into the still untapped market are some of the future opportunities identified by Zerodha. The company is seriously trying to democratize investment opportunities by simplifying the investment process and providing more retail investors with access to markets. Zerodha has now received regulatory approval to establish its own Asset Management Company (AMC) enhacing its position as a one-stop shop for retail investors. The integration of AI and technology can improve the overall customer experience by increasing efficiencies and provide personalized recommendations through advanced analytics.
Threats:
Zerodha faces increasing competition in the stock broking sector with newer players entering and offering similar services at competitive prices. Market volatility can be another major threat impacting both Zerodha’s topline and bottomline. With trading activity plateauing in recent months and new user additions dropping hy 40%, Zerodha needs to add value-added services to retain clients. And like any other fintech, Zerodha needs to remain adaptable to regulatory compliances.
2. Zoho: Made in India Software Products :
Zoho is one of the few software successes from India on the global arena, though with 1996 being its founding year, some will call it a dinosaur in front of its profitable peers among startups. Founded by Sridhar Vembu and Manikandan Lakshmanan, the Chennai-based Zoho has today grown into a name to reckon with in the software space with over 50 million users in over 160 countries. Zoho CRM, with a 5.79% market share globally in the lead management software segment, competes seriously against global giants like Salesforce and Hubspot.
The acquisition of vTiger, a popular open-source CRM software, played a significant role in the development of Zoho CRM and led to the company’s stupendous growth. The last three years balance sheet, in turn, brings smiles to the Zoho founders and management, especially on the profitability column. In FY20, Zoho’s profit was Rs 801 crore, that increased significantly to Rs 1,918 crore in FY21 and further to over Rs 2,700 crore in FY22. The profitability increased marginally by 3% in FY23 to reach Rs 2836 crore against revenues of Rs 8703 crore.
Strengths:
Zoho’s strengths include diverse product portfolio, user-friendly interface, integration capabilities and cost-effective solutions. The producrs range from Zoho CRM, Zoho Books, Zoho Projects, Zoho Analysis and Zoho DataPrep among others. The user-friendly interface allows users of varying technical expertise to access while seamless integration capabilities with other popular software allow a cohesive and efficient workflow. To top it all, the competitive pricing strategy allows it to slug it out with some of the global software giants.
Weaknesses:
Despite competing globally, Zoho’s brand equity is still low compared to the likes of Oracle, Salesforce and Microsoft especially among developers and enterprises in the developed markets, probably due to less marketing muscles. This has often restricted Zoho’s market reach and penetration in certain geographies across certain verticals. Last but not the least, notwithstanding the friendly user interface there is a perception of complexity about Zoho especially in the onboarding phase.
Opportunities:
The increasing shift from enterprises of all hues and sizes towards cloud-based software can help cloud-only players like Zoho to capitalize on the demand for flexible and scalable solutions. There are ample opportunities for Zoho to tap into hitherto untapped regions and verticals where its products are currently underrepresented. This can be done through suitable partnerships and strategic collaborations and acquisitions thereby expanding its ecosystem.
Threats: Intense competition on both fronts, global software giants with deep pockets and strong marketing muscles as well as innovative emerging players, pose a big threat to Zoho. Adapting to newer regulatory compliances in new geographies and new sectors as well as ensuring data privacy and security compliances are other major threats for Zoho.
3. Dream11: Capitalizing on Indian Cricket’s Dream Run :
Thanks to the IPL and the two cricket World Cups in recent months, everyone now knows of Dream11. But this has not been the case earlier when Harsh Jain and Bhavit Sheth founded this fantasy sports platform in 2008 in Mumbai. And before Indian audiences think it is all about cricket only, thanks to the aggressive endorsements on TV by the Indian cricketing superstars, it is time to remind that Dream11 has become India’s largest fantasy sports platform covering cricket, football, kabaddi, basketball , hockey , handball, volleyball, rugby, futsal, American football and baseball.
Dream11 holds a massive user base of over 100 million users, incidentally accounting for about a quarter of India’s internet users. The impact has been just like a dream both on the topline and bottomline fronts for Dream11. In FY20, Dream11’s revenue was Rs 2,070.4 crore, while it posted a profit of Rs 180.8 crore. The revenue grew by 53% to reach Rs 2,554.4 crore in FY21, while the profit increased significantly to Rs 327.1 crore. In FY22, the gross revenue crossed Rs 4,000 crore. However, the profit shrank by 56% to Rs 142 crore nevertheless keeping Dream11 among India’s top 5 profitable startups. The profitability again went north in FY23 reaching Rs 188 crore against revenue of Rs 6384 crore.
Strengths:
The revenue model of Dream11 primarily working on two levels insulates it from a sudden drop on either front. Entry-level fees are charged from the participants in the Dream11 paid contests arranged from time to time. When the users earn on the real-time performance of the players invloved, Dream 11 takes its cut, which accounts for about 15-20% of the total pool. Overall, Dream11 counts strong captured marketing driven by its first mover advantage, celebrity endorsement, customer service and pricing range as strengths creating a strong brand equity.
Weaknesses:
Operational difficulties, high expenditure and lack of high technology are weaknesses plaguing Dream11 today. There are operational issues of tracking the large number of franchisees who are now spread in every far-flung corner of the country and ensuring their operational accountability. In big leagues, the platform costs are often cited as too unreasonable, exceeding 25% per contest. In addition, the Dream11 technology definitely needs an upgrade to keep itself relevant in the growing competitive space.
Opportunities:
Dream11 has definitely benefited from the growing popularity of online gaming. The highs of Indian cricket in recent months leading to mass euphoria have also helped sustain Dream11’s dream run. Additionally, Dream11’s business is also expanding as new leagues and tournaments are being organized regularly across the world in different geographies. The younger sections of the society are taking more interest in this gaming sector as the IPL-induced excitement has shown this as a viable avenue to earn money fast.
Threats:
This opportunity of earning big and fast is also Dream11’s biggest threat especially with the social stigma attached to gambling in India. Circumventing the potential legal hurdles with gambling still banned by law in India is another major threat. The continued clash with Google Play Store and the emergence of several other competitors with a similar business model can be a potential threat. Nowadays, Dream11’s competitors all use the same point system and UI, which can turn off some of the regular users.
4. Nykaa: The Balanced Fashion Icon :
The name Nykaa will immediately draw resonance among all girls or even with the guys, thanks to their girlfriends, wives, sisters or mothers. After all this beauty and fashion retailer founded in 2012 by Falguni Nayar in Mumbai is today India’s largest beauty retailer, with over 1,000 stores across 70 cities throughout the country. Nykaa also has an online presence, with a website and mobile app that offer a wide range of beauty products, including cosmetics, skincare, haircare, and fragrances.
Nykaa’s balance sheets of last two years are a testimony of its stunning growth and healthy bottomline over the last two years. In FY21, Nykaa’s revenue was Rs 3,774 crore which increased by 36.3% to Rs 5,144 crore in FY22. However, profits contracted by 49% to Rs 21 crore compared to Rs 41.3 crore in FY21. The profits again rose by 90.5% to Rs 40 crore in FY23 against revenues of Rs 6386 crore. No wonder, Nykaa remained amongst India’s Top 5 profitable startups as per APAC News Network.
Strengths:
Nykaa can count diverse product portfolio, omnichannel presence, private label offerings, collaborations and exclusivity deals as well as data-driven insights for its e-commerce platforms as its strengths. Its wide range of beauty, personal care, and fashion products as well as in-house personal label brands not available on competing platforms has given Nykaa a strong brand recognition. The effective integration of its online and offline presence through the physical stores in various cities complementing its online platform, offering consumers multiple touchpoints has enhanced this brand visibility and created a loyal customer base.
Weaknesses:
Having a number of third-party brands on the portfolio is always fraught with challenges as Nykaa has minimal control over their availability, pricing and authenticity. While Nykaa’s private labels offer higher margins, scaling up to match the diversity of established brands can be challenging. Even though the omnichannel strategy is a strength, operating physical stores come with high operational costs impacting cash flow while maintaining a competitive edge on the e-commerce fromt against Amazon, Flipkart or other specialized brands can also be challenging. And finally vigilance against counterfeits and adhering to regulatory compliances cannot tolerate any slipups.
Opportunities:
Expansion is a keyword for Nykaa, be it diversifying product offerings by venturing into new beauty, wellness, or fashion sub-categories or expanding into tier-2 and tier-3 cities and even international markers, where the demand for beauty and personal care products is growing. India’s male grooming market is rapidly growing. Expanding and curating offerings in this segment can also help Nykaa capture a larger share of this burgeoning market. Developing and promoting its private labels can yield higher margins for Nykaa.
Threats:
Changing consumer preferences in the notoriously fickle fashion industry, regulatory changes, economic fluctuations and supply chain disruptions can be serious threats for Nykaa. Add to this the fact that many brands are focusing on building their online presence, bypassing platforms like Nykaa. This direct-to-consumer approach could reduce the range of exclusive products available on Nykaa. Changing rental dynamics, local disruptions, or competition from other retail outlets can impact the profitability and operation of Nykaa’s physical stores too.
5. EaseMyTrip: Rise of the Online Travel Agent :
EaseMyTrip was a travel portal aimed at simplifying travel booking and experiences launched in 2008 by Nishant Pitti, Prashant Pitti, and Rikant Pitti, a passionate trio of brothers in New Delhi. While similar travel portals (later apps) like MakeMyTrip or GoIbibo came up around the same time EaseMyTrip has carved its own niche through online and offline booking platforms for air tickets, hotels, holidays, train tickets, buses, cabs, and activities and its extensive reach across India, catering to both leisure and business travelers.
A host of products and platforms including EaseMyTrip Deals, EaseMyTrip Partner Network, EaseMyTrip Corporate and EaseMyTrip website and mobile app as well as an extensive branch network of over 85,000 agents across India, bridging the gap between online and offline booking have given EaseMyTrip both healthy topline and bottomline. In FY21, EaseMyTrip reported a revenue of Rs 106.69 crore and a profit after tax of Rs 61 crore. This increased to a profit of Rs 185 crore in FY22 against revenues of Rs 448 crore. EaseMyTrip saw record growth in both profit and revenue in FY23 with profit growing by 16% to reach Rs 215 crore while revenues grew by 32% to reach Rs 591 crore.
Strengths:
EaseMyTrip generates a lot of information for the travelers and offers them unique holidays often delivering the customers personalized services. The company convinced their B2B agents for more commissions and started giving them credit facilities. As a result, the flight tickets and holiday packages have become more affordable for the customers. Through mobile apps and other social media platforms, the customers have been made aware of the travel trends and are now getting attracted towards exploring more destinations. EaseMyTrip also provides full support to customers looking to reorganize or recreate their tour packages.
Weaknesses:
There are other well established and early entrants as online travel portals who are also well entrenched in the market. Newer entrants are also joining the online travel bandwagon with newer technologies. In addition there are the physical travel agents and there is a general reluctance among customers to use internet for financial transactions like booking tickets online. Expanding the hotel networks in offbeat destinations remain a challenge.
Opportunities:
Travel and tourism industry is witnessing a growing number of people showing their interests. Along with metropolitan cities, tier 2 and tier 3 cities of India are also attracting a huge number of holidaymakers at present. Customers currently using traditional methods of booking and EaseMyTrip can offer them better travel packages in line with customer expectations. Add to it there are still untapped sections of the international tourism market.
Threats:
Situations like the last pandemic can severely impact the travel and tourism sector and virtually paralyze companies like EaseMyTrip. Many established physical travel agents can offer online services and attract customers. More and more airlines, hotel networks need to brought into the fold and regular checks undertaken so that the quality of customer service is never impacted.
6 Shiprocket: Logistics’ Digital Flavour :
Shiprocket today is more than a courier company but India’s largest e-commerce enablement platform, streamlining shipping fulfillment for a multitude of online businesses. Founded by Saahil Goel, Vishesh Khurana, Akshay Gulati and Gautam Kapoor in 2017 in New Delhi, Shiprocket not only competes against logistics giants like Blue Dart, DHL, DTDC among others, but has over 25,000+ active sellers on its roster for their shipping needs. It also has an extensive reach across 24,000+ pin codes in India and 220+ countries globally.
In FY21, Shiprocket’s operating revenue was Rs 358.01 crore even as it posted a profit of Rs 12.47 crore. In FY22, the revenue grew by 71% to reach Rs 611 crore though there was a setback with Shiprocket posting a loss of Rs 93 crore. While revenues surged by 78% to reach Rs 1089 crore in FY23, the net losses widened to Rs 341 crore in FY23. Why then, one would wonder, is Shiprocket being featured amongst 10 profitable startups. Actually the losses of Shiprocket rose due to its two acquisitions – Omuni for Rs 200 crore and Pickrr for $200 million in FY23 as the company absorbed a loss worth Rs 184 crore in the completion of these acquisitions.
Strengths:
The company handles data in a digital, structured and standardized format eliminating or reducing the need for handling and filling up paper documents by the operators. Not only does it reduce manual errors, but is a long-term cost saving too. Digitization further allows the operators to input the data once and reuse the data as per scope and authorization of the work as ad when necessary. And obviously having less physical outlets reduces budgetary overheads. The inorganic growth through the acquisitions has also bolstered Shiprocket.
Weaknesses:
While digitization can be a strength, however the investments required in adopting and upgrading technologies could be a drain on Shiprocket revenues. There are still obstacles, especially regulatory hurdles, in transferring to e-documents totally. Document standardization would also require substantial revision of different standards between different stakeholders which can be complex and time consuming. The acquisitions can also turn out be Achilees Heel as cultural integration often does not work out smoothly.
Opportunities:
The greater acceptance of digital signatures and its legal validation could open up newer avenues for Shiprocket. Digitization will spur automation and for Internet-native companies like Shiprocket adoption of technologies like Big Data, IoT, blockchain could drive sustained growth. Also with most logistics players primarily operating in a physical mode, digitization could prove to be Shiprocket’s growth catalyst.
Threats:
The same logic where it scores over physical competitors like Blue Dart, DTDC, DHL and others could prove to be a bane as they too move into a digital avatar but with a stronger brand recall than Shiprocket. Freight forwarders, cutoms brokers and other stakeholders in the supply chain could often cause disruptions upsetting Shiprocket’s applecart. Even the Indian cultural mindset to go largely digital while sending critical documents could be an impediment.
7. Infra.market: Construction Sector Gets a Digital Makeover :
Infra.market is a leading construction tech company attempting to revolutionize the traditionally fragmented and inefficient construction industry in India. Founded by Souvik Sengupta and Aditya Sharda in 2016 in Mumbai, Infra.market provides cost-effective building materials under own brands like Buildmate and Structura. It has over 500,000 registered users, including contractors, architects, builders, and developers and an extensive network of over 1,000 suppliers and manufacturers across India.
In FY20, Infra.market generated revenues of Rs 351 crore with profit of Rs 8 crore. In FY21: Infra.Market’s revenue surged to Rs 1,243 crore, and profits increased 4X to Rs 31 crore, while in FY22 the revenue increased significantly to Rs 6,236 crore, and profits surged 6X to Rs 186 crore. In FY23, Infra.Market’s revenue surged 90% to Rs 11,846 crore but profit dipped to Rs 155 crore.
Strengths:
Infra.markets has acquired a deep expertise in understanding the complexities and requirements involved in planning, designing and executing construction projects. A strong positive brand reputation is attracting clients, partners and investors helping Infra.markets secure new projects. Trusted relationships with suppliers, sub contractors, government agencies and the dubious nature of the unstructured real estate sector have also given fillip to Infra.markets.
Weaknesses:
Failure to keep up with technology advancements may pose challenges to Infra.markets in terms of efficiency and productivity. Outdated technology or equipment can result in higher operational costs, project delays and losing out in a competitive area. Lack of skilled manpower with relevant technical skills can hinder Infra.market’s bid to capture newer projects. Changing government regulations and adaptability could prove to be another bottleneck.
Opportunities:
The burgeoning Indian construction sector poses huge opportunities for Infra.markets. Plus the dubious nature of businesses from unstructures real estate players could attract clients towards Infra.markets. Enabling innovations like digital tools, drones or BIM software could open up new avenues too. Last but not the least strategic partnerships with global players, research agencies or government agencies could widen the horizon for Infra.markets.
Threats:
Economic downturns often affect project financing both in metros as well as in the hinteland. Changing government regulations, shifts in consumer preferences and even natural calamities in a vast country like India could be an Achillees Heel for Infra.markets. Many physical real estate players are also modernizing themselves and global construction players too are entering the Indian market.
8. Gupshup: Chai pe Charcha Through GenAI :
Beerud Sheth
CEO, Co-Founder, Founder Executive Management, Operations at Gupshup
Gupshup is a leading Conversational Messaging Platform (CMP) that enables businesses to connect with customers through chatbots, voice assistants, and other messaging channels. Founded by Beerud Shah in 2007 in Mumbai, Gupshup is today headquartered in Cupertino and has over over 6 billion messages processed monthly across millions of businesses globally. It has a strong presence in emerging markets like India, Southeast Asia, and Latin America. Across all these geographies, Gupshup aims to empower businesses to deliver richer, more personalized experiences across various touchpoints through conversational messaging.
The balance sheets over the last few years have been testimony to Gupshup’s success. In FY20, the net profit was Rs 36.5 crore which jumped over 43% to Rs 52.5 crore in FY21. In FY22, Gupshup’s revenue crossed Rs 1,000 crore, but the net profit dropped to Rs 40 crore, primarily due to a significant increase in expenses. There was a significant turnaround in FY23 though with Gupshup’s India revenue from operations increasing by 43% to Rs 1,619 crore and profit reaching Rs 49 crore.
Strengths:
The 4Cs: Channels, CPaaS, CX, Consultation offer breadth and depth of capability for Gupshup. As a result, Gupshup builds conversational journeys for both non-technical user using the no-code interface or pre-defined templates and for sophisticated and advanced technical developers add ing API calls or even embedding code. It was one of the first companies to launch an Auto-Bot Builder and its own domain-specific LLMs optimized to industries (e.g. banking, commerce, travel, etc.).
Weaknesses:
Bolstering its GenAI efforts to provide enterprises personalized, human-like chatbots, but with business controls and guardrails could prove to be a challenge for Gupshup. While Gupshup.io’s strategic acquisitions over the last two years have strengthened the company’s industry domain, the cultural integration of acquired companies often create confusion leading to serious disruptions in business.
Opportunities:
Gupshup is democratizing communications through the use of the chatbots, especially leveraging robust CPaaS APIs and tools such as no-code Bot Studio, Agent Assist and Campaign Manager, layered with Conversational AI. Gupshup products can help build a range of use cases including lead generation and qualification, gamification, product discovery, KYC, loan decisioning, appointment bookings and customer service.
Threats: Like all conversational AI chatbots, Gupshup faces threats from one-time events like malware and DDOS threats. Repeated strikes on enterprises using Gupshup could turn them off from the company. Even use privacy violations can be a serious concern in geographies where this an even more sensitive issue.
9. Mamaearth: Eco-Friendly Touch for Babies and Moms :
More than a fashion brand, Mamaearth as a brand is known for its natural and toxin-free beauty and personal care products. Founded by former financial analyst Ghazal Alagh and her husband Varun Alagh in 2016 in Gurugram, some of its popular products include Ubtan Face Wash, Onion Hair Oil, Coco Milk Shampoo, Mineral Sunscreen and Happy Heads Shampoo & Conditioner among others. Targeted for both babies and their mothers, Mamaearth covers various categories like skincare, haircare, body care, makeup, baby care, and even household products.
Today Mamaearth is one of the leading natural beauty brands in India with a strong online and offline presence. It exports to over 20 countries worldwide and the results are evident from its bottomline. In FY20, Mamaearth had a revenue of Rs 109.8 crore and a loss of Rs 5.92 crore. The tables got turned next year in FY21 with revenue increasing significantly to Rs 461 crore, and Mamaearth posting profit of Rs 24.6 crore. The revenue continued to grow in FY22, reaching Rs 943 crore, and profit stood at Rs 14 crore. Revenues further increased to Rs 1,493 crore in FY23, but profits dwindled to Rs 4 crore due to rising expenses.
Strengths:
Mamaearth’s eco-friendly and natural product positioning is one of its biggest strengths. This resonates well with consumers increasingly becoming conscious about eco-friendly products. Its product portfolio is fairly diverse with its Made Safe certifications creating trust among consumers. Having started as a digital brand, Mamaearth has a strong engagement strategy through content marketing, including blogs and videos that helps build a deeper brand connection. Innovative products like onion hair oil or vitamin C infused products also offers novelty to consumers.
Weaknesses:
Mamaearth is still primarily an online-first brand with limited offline presence. This could be a hindrance in tapping potential consumers who prefer buying from physical stores only. Mamaearth faces stiff competition from both local and international brands gradually coming to India. Dependence on digital channels, complexities in the supply chain and premium pricing could prove to be other deterrents for Mamaearth.
Opportunities:
There is a huge opportunity to expand physically tapping those customers preferring to shop offline. While it can diversify its product portfolio through more R&D, Mamaearth can also look at expanding globally especially leveraging on sustainability mantra because of its eco-friendly image. It has an opportunity to develop a dedicated range of products catering specifically to the needs of men. On the technology front, Mamaearth could leverage AR or AI-driven recommendations more on their platforms.
Threats:
With Mamaearth’s commitment to using natural ingredients, any fluctuation in the availability or pricing of these raw materials could impact product production and costs. Global supply chain disruptions can be another serious threat in the future. Intense competition and tendency of counterfeits coming in the market should be other threats looked at seriously. As a primarily digital brand, security concerns are also a real threat.
10 BillDesk: India’s Preferred Payment Gateway
Founded by M N Srinivasu, Ajay Kaushal and Karthik Ganapathy in Mumbai in 2000, BillDesk, the erstwhile IndiaIdeas.com Limited, is a leading Indian online payment gateway company based in Mumbai. BillDesk is a leading BBPOU in the Bharat Bill Payment System (BBPS), facilitating bill payments for millions of users across India using over 150+ payment methods, including cards, net-banking, UPI, wallets, and Buy Now Pay Later schemes.
By enabling usinesses to set up recurring payments using cards, eNACH, or UPI AutoPay, BillDesk has developed a strong network of partnerships with banks and payment networks. The results are obvious from the previous balance sheets. In FY20, BillDesk clocked Rs xxx crore in revenues with profits of Rs 211.2 crore. The revenue grew by 17.7% to reach Rs 2124.2 crore in FY21 while profits increased by 16.3% to reach Rs 245.6 crore. The revenues grew by 15% to reach Rs 2443 crore in FY22 but profits contracted by 39% to Rs 149.6 crore due to a surge in expenses. Though the revenues grew by 9.6% to touch Rs 2,678 crore during FY23, profits contracted further to Rs 141.91 crore. One reason forthis could be the aborted PayU-BillDesk acquisition deal.
Strengths:
BillDesk is one of the largest bill payment companies in the countryhaving generated 31 crore bills on the biller side and 25 crore on the customer side in February this year. Though its business model primarily focuses on charging fees for the processing and settlement services of electronic transactions, BillDesk also generated a significant part of its revenue from loyalty programs for its clients with the remaining part coming from the sale of products (PINS and e-top-up subscriptions).
Weaknesses:
Though it is still one of the most profitable payment companies in the country, BillDesk has been seeing some stagnation in net profits over the last three years. In October 2022, PayU had called off BillDesk’s acquisition after 14 months of signing the agreement due to the non-fulfillment of certain conditions. As this would have been one of the biggest deals in India’s fintech space, there was definitely a dent on BillDesk’s reputation post the abortion.
Opportunities:
Customers still have a high degree of trust in the BillDesk payment gateway probably due to its first mover advantage. This great reliability when it comes to making payments using this platform, allows extensive usage in retail as well as in utilities. BillDesk could even explore into some new and inventive payment solutions to maintain its market leadership.
Threats:
The growing clouts of the competitors in the payment space could become the biggest threat for BillDesk. It ompetes with the likes of Razorpay, Infibeam Avenues, and PayU and with Razorpay seeing a 54% growth in scale to Rs 2,279 crore in FY23 along with Rs 7.2 crore profit and Infibeam Avenues posted Rs 1,962 crore revenue and Rs 136 crore profit during FY23, the threat is for real.
Rajneesh De, APAC News Network
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