Bike Bazaar’s FY22 Revenue Surges by 76.5% to Rs 149.72 Crore
- ByStartupStory | April 13, 2023
Bike Bazaar, a prominent two-wheeler financing and e-commerce platform in India, has experienced rapid growth with its scale expanding threefold in fiscal years FY21 and FY22. As per its consolidated financial statements filed with the Registrar of Companies (RoC), Bike Bazaar’s gross revenue surged by 76.5% to Rs 149.72 crore in FY22, up from Rs 84.84 crore in FY21.
In FY20, Bike Bazaar recorded a revenue of Rs 50.6 crore. The platform, which facilitates buying, selling, and financing of used two-wheelers (including electric and petrol variants), generates a significant portion of its revenue through financing services. Interest earned from loans accounted for 71.6% of the total operating revenue. In FY22, this income increased by 64.6% to Rs 107.16 crore, compared to Rs 65.11 crore in FY21, as per the company’s consolidated financial statements filed with the Registrar of Companies (RoC).
In FY22, sales of used (pre-owned) two-wheelers contributed to only 7.2% of Bike Bazaar’s total collections, but showed a significant increase of 2.5 times, reaching Rs 10.84 crore. The company also generates revenue from processing and servicing fees associated with loan disbursements, with collections from this vertical doubling to Rs 31.72 crore in FY22 compared to Rs 15.5 crore in FY21. Additionally, Bike Bazaar earned Rs 2.05 crore from gains on the sale of current investments, representing a growth of 7.3% during FY22. On the cost side, employee benefits accounted for 31.2% of the overall expenses, amounting to Rs 64.59 crore in FY22, reflecting a substantial increase of 44.8%. This figure includes Rs 1.46 crore as non-cash expenses related to ESOP (Employee Stock Ownership Plan).
In FY22, Bike Bazaar experienced a significant increase in interest costs, which rose by 73% to Rs 63.21 crore, constituting 30.5% of the total expenditure. The company also incurred Rs 13.72 crore towards loan write-offs. Collection charges surged by 2.77 times, reaching Rs 11.29 crore, and commission and brokerage paid to agents amounted to Rs 9.85 crore during FY22. Bike Bazaar also purchased pre-owned vehicles worth approximately Rs 10 crore during the year. Additionally, advertising-promotion costs and call center-information technology costs increased by 512% and 30.1% respectively, totaling Rs 7.17 crore and Rs 7.69 crore. Overall, the company’s expenditure rose by 54.6% to Rs 207.01 crore in FY22. Despite managing to control expenses, Bike Bazaar’s losses still grew by 17.7% to Rs 55.3 crore in FY22, compared to Rs 47 crore in FY21. The company’s Return on Capital Employed (ROCE) and Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin stood at -26.63% and -34.60% respectively in FY22. On a unit level, Bike Bazaar spent Rs 1.38 to earn a single rupee.
While Bike Bazaar has been gaining momentum and nearing the break-even point, the financial landscape for two-wheeler loans is evolving rapidly. Focusing on the pre-owned vehicle market may narrow down competition from large organized players, but it also comes with added risks, as seen in the write-offs column. Managing the risk-return trade-off in the two-wheeler segment, especially with the sharp drop in perceived asset value after the second sale, will be challenging. These loans are only slightly better than unsecured loans. However, electric two-wheelers offer opportunities to build a stronger connection with borrowers through services such as battery swapping, warranties, or replacement offers. Companies like Bike Bazaar will be at the forefront of discovering what strategies work and what don’t in this new market. They hope that successful approaches can be scaled up while ineffective ones can be identified and abandoned quickly.
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