BankBazaar.com plans to raise $100 million (about ₹795 crore), which will help the company accelerate business growth in next three years as it expects to grow 80-90 per cent in FY23, a top company official said.
Without giving any timeline for fundraise, Founder and Chief Executive Officer Adhil Shetty said the fintech firm achieved a break-even on a month-on-month basis in March 2022 and right now there is no need for immediate capital to fuel growth.
"This year we are confident that we will grow by 80-90 per cent in terms of topline and we believe that we will end the year with EBIDTA profitability. We finished A to D round of fundings till now, the next round will be an E round. We have not finalised the quantum, but it will be of a size somewhere around $100 million. We don't have a stated timeline to raise the funds. We don't need it to deliver the target of 80-90 per cent growth but it will turbo charge our growth in subsequent years, so we don't need it this year," Shetty told PTI in an interview.
‘Winter has set in’
Shetty, however, said "winter has set in" with the funding environment changing completely from what it was about one or two quarters ago. Company's primary building blocks are not to spend a lot of money on advertising but being able to sell with low cost customer acquisition and to also have a business that has "high profit margin" supported by Artificial Intelligence (AI) and Machine Learning (ML), he said.
Over the years since its inception in 2008 as a loan comparison platform, the company has now evolved as a co-branded credit card issuer with Yes Bank and RBL Bank as the banking partners, besides offering credit score services to its customers. BankBazaar.com has not achieved break-even on EBITDA (earnings before interest, taxes, depreciation, and amortization) level -- measure of a company's overall financial performance.
"We were not able to achieve break-even on a full year basis in FY22, we had a topline of ₹150 crore on an annualised basis. Our aspiration is to be able to achieve it on a full year basis in FY24, obviously the environment is very-very tough. We continue to manage things very closely, wiping of accumulated losses will take time," Shetty said without sharing the data on losses.
The company which claims to be the largest fintech co-branded credit card issuer and online platform for free credit score with over five crore registered users, is backed by global investors such as WSV, Experian, Eight Roads, Sequoia India, Walden International and Amazon.
Talking about credit card usage trends, he said BankBazaar issues co-branded credit cards to only high value customers having credit score of over 700-750 as they understand the importance of timely re-payments and do not have the propensity to default as well.
The platform is also mulling joining the Account Aggregator system soon, Shetty said, adding "it is something which is in very advanced stages". It will also help the company, which only offers services to retail customers as of now, to cater to other category of customers such as MSMEs as data availability will be easier.
"For MSME loan you need data on, lets say income tax statement or the GSTN data. Once Account Aggregator makes up...I think a tremendous opportunity will open up for players such as ours to be able to look at MSME in loan space," said the official.