B2B fintech firm Perfios posts Rs 136 Cr revenue and cut on 62% losses in FY22

• ByStartupStory     |    February 16, 2023

SaaS-based B2B fintech firm Perfios has emerged as a leader in its segment in both scale and capital raising. The company raised $100 million in total funding including a $70 millionSeries C round in February 2022. In terms of scale, it managed over 88% growth in FY22.

The operating revenue for the Bengaluru-based startup grew 88.1% to Rs 136.4 crore in FY22 while its losses contracted 62.1%, according to its consolidated financial statements filed with the Registrar of Companies.

Perfios offers a bundle of services to financial institutions including income analysis, fraud checks, verification, and automated customer onboarding. Income from these services was the only source of revenue for the firm with Warburg Pincus as key investor.

The firm claims to have over 500 million transactions categorised per month with 80 million API calls. It has 400 clients across 18 countries.

On the cost side, employee benefits expense formed 64.2% of the total cost which surged 52.5% to Rs 97.47 crore in FY22 from Rs 63.92 crore in FY21. It also includes Rs 1.19 crore on ESOP expenses (non-cash).

Being a compliance maintenance and fraud check company, legal and professional costs became the second largest cost centre for Perfios followed by the employee benefit cost. This cost grew by 18.3% to Rs 22.83 crore during the last fiscal year.

It also spent another Rs 5.37 crore on rent which pushed Perfios’ overall expenditure by 39.9% to Rs 151.9 crore in FY22. Despite the almost 40% rise in expenses, the company managed to narrow losses by 62.1% to Rs 12.36 crore in FY22 from Rs 32.64 crore in FY21.

ROCE and EBITDA margin of Perfios improved to -1.67% and -5.24% during FY22. Perfios spent Re 1.11 to earn a single unit of operating revenue in the fiscal year ending March 2022.

Deeply-embedded in the BFSI sector, Perfios offers a suite of tools and solutions that are well suited for the evolving sector with more digitisation and market expansion. The firm seems well placed to deliver on profitability soon, and the road to a planned IPO in 2-3 years beckons.

Perfios majorly competes with Signzy, IDfy, Digio and Hyperverge. IDfy’s revenue grew 50%to Rs 56.48 crore in FY22 but it soared 2.5X to Rs 18.72 crore during the same period. Signzy ended last fiscal with Rs 32 crore in revenue and Rs 17 crore loss.

Intra-city logistics segment saw a flurry of startups during the 2014-17 period but only a handful of them managed to thrive. One such startup is Porter which amassed $152 million in total funding including a $103 million Series E round led by Tiger Global.

Besides scoring big rounds, Porter’s scale also shot up 4X in the last two fiscal years (FY21 and FY22) with controlled expenditure.

The Mumbai-based company provides a full stack logistics platform to help businesses optimize their last-mile delivery operations. Income from goods transportation services formed 99.6% of the operating revenue which surged 2.6X to Rs 843.89 crore in FY22, according to Porter’s financial statement with the RoC.

The rest of the operating income came from specified services which grew 45.8% to Rs 3.79 crore during FY22. Its earning from interest on fixed deposits increased around 2.5X to Rs 14.38 crore.

Vehicle running expenditure which include all vehicle-related and delivery personal costs accounted for 79.9% of overall cost. This cost grew 2.55X to Rs 786.4 crore during FY22 from Rs 307.62 crore in FY21.

To keep up with the growing scale, the company ramped up its workforce in FY22. As a result, Porter’s employee benefit expenditure jumped 2.17X to Rs 106.05 crore and formed 10.8% of its overall cost.

Advertising and telephone postage costs spiked 3.88X and 2.18X to Rs 27.31 crore and Rs 10 crore respectively in FY22 which catalyzed Porter’s overall cost by 2.5X to Rs 984 crore in FY22.

The Tiger Global-backed company kept control over its expenses and narrowed down losses by 12.1% to Rs 122 crore in FY22. Its ROCE and EBITDA margin improved to -16.88% and -13.08%. On a unit level, Porter spent Rs 1.16 to earn a single unit of operating revenue in FY22.

Intra city or last mile delivery is perhaps the most challenging and crucial aspect of logistics. This is where reputations are made, and sadly lost for too many suppliers. Porter has done well to make a dent in this tough market, where local knowledge and adaptability can be taken to extremes. Ironically, it is precisely this local touch that enables many smaller firms to outmanoeuvre the larger players, profitably. Porter will provide a very good study on the relevance of trying to disrupt this market, should it succeed eventually.

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