Info Edge India: Info Edge writes off investment in Bijnis; remains optimistic about investment in Indian startups
Info Edge, which owns about 26% of Bijnis, said it made the decision “in a spirit of conservatism and prudence” and taking into account the startup’s ongoing cash burn and limited cash availability in proportion to “unspecified commitments.” in relation to their buyback obligations.
Bijnis, backed by major investors such as Sequoia Capital, Matrix Partners and Westbridge Capitallast time closed a $30 million Series B funding round in September 2021..
The startup has raised $43.5 million so far and is backed by several Delhi-based angel investors, including Zomato CEO Deepinder Goyal, OfBusiness founders Ashish Mohapatra and Ruchi Kalra.
In a statement explaining the write-off, Rishab Katiyar, director of Info Edge Ventures, called it a “technical write-off” caused by unspecified liabilities to Bijnis that could materialize in connection with the buyout obligations stipulated in the shareholder agreement. . “This liability is contingent and has been accounted for based on the Company’s conservative accounting policies,” Katiyar said.
“Therefore, it is not a reflection of the company’s financials, market opportunities, and value proposition. In addition, this obligation materializes only if the company is unable to secure an exit for key investors through other exit mechanisms, such as a sale to a third party, a listing among other mechanisms provided for in agreements by a certain date in the future, and all key shareholders together. . decided to use the buyback option as an exit mechanism,” added Katiyar.
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Founded in 2015 by Siddharth Vij, Chaitanya Rathy, Siddharth Rastogi and Shubham Agarwal, Bijnis is a technology platform that connects manufacturers and retailers in the fashion and lifestyle segment and offers opportunities including third-party payments and logistics solutions. The write-off impacted Info Edge’s bottom line, which reported a net loss of Rs 272.8 crore. (belonging to shareholders of the company) for the quarter ended March 2023 compared to a net profit of Rs 628.9 crore earned in the same period last year.
According to regulatory filings with the Registrar of Companies, reported operating revenue was Rs 25 crore for the year ended March 31, 2022, up 57% from fiscal year 21. The startup’s losses nearly tripled to Rs 54.6 crore in FY 22, compared to Rs 18.3 crore in FY 21.
However, Info Edge’s management remained optimistic about investing in startups. Speaking to analysts during a post-earnings call, Info Edge promoter and executive vice chairman Sanjeev Bikchandani said now is a good time to invest in startups in India if you have an “8-10 year horizon.”
Bikchandani’s comments come at a time when the Indian startup ecosystem is experiencing a funding slowdown following the 2021 boom period. The Indian consumer tech ecosystem is also seeing several markdowns through cross-funding with unicorn startups such as SwiggyByju’s, Pine Labs, PharmEasy, whose valuations have plummeted because of these investors.
Bikchandani said it’s hard to predict when the ecosystem will change, but said Info Edge is “focusing on valuation, entrepreneurs and cost-effectiveness” when making its investment calls. Info Edge has supported several Internet consumer startups such as food and grocery delivery company Zomato, financial services aggregator Policybazaar, education technology platform Adda24x7, and several others.