Companies

Instamojo aims to increase revenue contribution of e-commerce vertical to 40% by FY 2024

Yatti Soni Bengaluru | Updated on November 03, 2021

Firm recorded over 2.5 lakh D2C merchant subscriptions since February 2021 beta launch of the e-commerce vertical

Instamojo which started as a payment solutions provider for MSMEs, aims to increase the revenue contribution of its e-commerce vertical from 10 per cent to 40 per cent by FY 2024, as the company recorded over 2.5 lakh D2C merchant subscriptions since February 2021 beta launch of the e-commerce vertical.

The company forayed into the e-commerce sector earlier this year, with the launch of a platform that enables small and medium businesses to set up an online store, among other things. Out of the total base of merchants that the company has accrued so far, almost 60 per cent would be from the company's existing network of merchants built over the years through its online payments business.

Talking about the rapid customer adoption, co-founder and CEO, Sampad Swain told BusinessLine, “One of the major reasons for this jump in user adoption was the fact that Instamojo was already sitting on a large captive base of merchants (about 2 million) who have been using Instamojo’s payment link product for years and now find the e-commerce offering as an easy extension.”

Further, the company has seen maximum traction from businesses based out of the city of Pune, followed by Delhi, Mumbai and Bangalore amongst the metros. In fact, 18 per cent of e-commerce sellers on the platform are from Pune. Amongst the non-metros, Lucknow leads the way, followed by Jaipur and Ahmedabad where the top e-commerce categories included fashion, art and food.

While the company does not offer regional language support on its platform at this point, it does have plans to add regional language support in the next few years. Instamojo had also acquired a vernacular content platform Showman in April 2021.

Onboarding plans

Going forward, the company aims to onboard over 250,000 small businesses by the end of FY 2022. To achieve this, Instamojo has been working on enabling a complete e-commerce ecosystem for the merchants which is beyond the online store, payments, and logistics. Swain noted that the company is adding new functionalities to the platform based on merchants’ demands and also trying to bring third-party partnerships to enable this.

Instamojo’s e-commerce platform offers merchants the tools to build and manage their own business website, along with other integrated services such as digital payments, logistics, instant pay-outs, access to credit, marketing tools, and CRM for businesses to gain visibility. Merchants can also opt for the “Do it for Me (DIFM)” feature where Instamojo’s tech experts take charge of building a merchant’s website to provide a hassle-free experience. Instamojo also offers merchants the free learning platform called mojoversity.

Currently, Instamojo’s “The Do it for Me (DIFM)” feature does not see much adoption as compared to the Do-It-Yourself(DIY) feature as the DIFM feature is a comparatively expensive offering. But the company estimates that the revenue contribution of the “Do-it-for-me” feature would become significantly larger than DIY over the next 18-odd months.

Also read: Fintech start-up Instamojo forays into e-commerce

The company is working on building a marketplace of partners who can do such store customisations for merchants and expects this to be one of the biggest areas of investment for the next two to three quarters. These partners would include freelance developers, web development agencies, and so on.

“We want to create an unbiased platform for partners that they would want to join because they see it as a potential revenue opportunity. The platform also needs to have merchants who want to use the partners’ services — so it's an entire ecosystem that needs to be built. A lot of investment will go into creating this partner platform, sales engine to get those partners on board, training the partners, and awareness creation among other things,” Swain added.

Founded in 2012 by Sampad Swain, Akash Gehani, and Aditya Sengupta, Instamojo, in early 2019 raised Series B funding from Gunosy Capital, AnyPay-a Japanese payments firm, and existing investors. In November 2014, the company raised $2.6 million in Series A funding from Kalaari Capital, Blume Ventures, 500Startups, and others. Prior to this, it had raised approximately $500,000 from 500 Startups, Blume Ventures, and angel investors Rajan Anandan, Sunil Kalra, Shailesh Rao, Rob de Heus among others.

Published on November 03, 2021

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