ETtechConsumer internet group Info Edge India Ltd, which clocked losses in the quarter-ending March 31, 2023, has written off its investments in Bizcrum Infotech, the parent company of B2B startup Bijnis, amounting to Rs 76.6 crore during the quarter. This comes close on the heels of Info Edge writing off its Rs 276 crore investment in Rahul Yadav-founded 4B Networks in the December-quarter.
Info Edge, which holds around 26% stake in Bijnis, said that it made the decision “following the principles of conservatism and prudence”, and after taking into account the startup’s continuing cash burn and limited availability of cash in proportion to “unspecified liabilities” with respect to its buyback obligations.
The startup has so far raised $43.5 million, and is also backed by several Delhi-based angel investors including Zomato chief executive Deepinder Goyal, OfBusiness founders Asish Mohapatra and Ruchi Kalra.
In a statement clarifying the write-off, Info Edge Ventures’ principal, Rishabh Katiyar, that it was a “technical write-off” caused by the unspecified liabilities on Bijnis, which may materialise owing to the buyback obligations provisioned in the shareholders’ agreement. “This liability is contingent in nature and has been factored in based on the conservative accounting policies followed by the company…,” Katiyar said.
“Therefore, this is not a reflection on the company’s financial performance, the market opportunity and the value proposition. Further, this liability would only materialise if the company is unable to provide an exit to the key investors via other exit mechanisms like third party sale, listing, among other mechanisms captured in the agreements by a specified date in future and all key shareholders together choose to exercise the buyback right as an exit mechanism,” Katiyar added.
Founded in 2015 by Siddharth Vij, Chaitanya Rathi, Siddharth Rastogi, and Shubham Agarwal, Bijnis is a technology platform that connects manufacturers and retailers in the fashion segment, lifestyle categories, and offers capabilities including third-party payments and logistics solutions.
The write-off had a bearing on the bottomline of Info Edge, which reported a net loss of Rs 272.8 crore (attributable to the equity holders of the company), during the quarter ended March 2023, compared to a net profit of Rs 628.9 crore turned during the same period last year.
According to regulatory filings made with the Registrar of Companies, reported operating revenues of Rs 25 crore during the year ended March 31, 2022, 57% higher from FY21. The startup saw its losses widening almost threefold to Rs 54.6 crore during FY22, compared to Rs 18.3 crore in FY21.
Info Edge’s management however remained upbeat about investments in startups. Speaking to analysts during the post-earnings call, Info Edge promoter and executive vice-chairman Sanjeev Bikhchandani said that it was a good time to invest in startups in India if one had a “8-10 year horizon”.
Bikhchandani’s comments come at a time when the Indian startup ecosystem has been reeling under a slowdown in funding following the boom period of 2021. The Indian consumer tech ecosystem is also witnessing several markdowns by crossover funds with unicorn startups such as Swiggy, Byju's, Pine Labs, PharmEasy having their valuations slashed by these investors.
Bikhchandani said it was difficult to predict when the ecosystem would turn around, but said that Info Edge was being “particular about the valuations, the entrepreneurs and cost-efficiency” while making its investment calls. Info Edge has backed several consumer internet startups such as food and grocery delivery company Zomato, financial services aggregator Policybazaar, edtech platform Adda24x7, and several others.
Info Edge, which holds around 26% stake in Bijnis, said that it made the decision “following the principles of conservatism and prudence”, and after taking into account the startup’s continuing cash burn and limited availability of cash in proportion to “unspecified liabilities” with respect to its buyback obligations.
Bijnis, which is backed by marquee investors such as Sequoia Capital, Matrix Partners and Westbridge Capital, had last closed a $30 million Series B funding round in September 2021.
The startup has so far raised $43.5 million, and is also backed by several Delhi-based angel investors including Zomato chief executive Deepinder Goyal, OfBusiness founders Asish Mohapatra and Ruchi Kalra.
In a statement clarifying the write-off, Info Edge Ventures’ principal, Rishabh Katiyar, that it was a “technical write-off” caused by the unspecified liabilities on Bijnis, which may materialise owing to the buyback obligations provisioned in the shareholders’ agreement. “This liability is contingent in nature and has been factored in based on the conservative accounting policies followed by the company…,” Katiyar said.
“Therefore, this is not a reflection on the company’s financial performance, the market opportunity and the value proposition. Further, this liability would only materialise if the company is unable to provide an exit to the key investors via other exit mechanisms like third party sale, listing, among other mechanisms captured in the agreements by a specified date in future and all key shareholders together choose to exercise the buyback right as an exit mechanism,” Katiyar added.
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Founded in 2015 by Siddharth Vij, Chaitanya Rathi, Siddharth Rastogi, and Shubham Agarwal, Bijnis is a technology platform that connects manufacturers and retailers in the fashion segment, lifestyle categories, and offers capabilities including third-party payments and logistics solutions.
The write-off had a bearing on the bottomline of Info Edge, which reported a net loss of Rs 272.8 crore (attributable to the equity holders of the company), during the quarter ended March 2023, compared to a net profit of Rs 628.9 crore turned during the same period last year.
According to regulatory filings made with the Registrar of Companies, reported operating revenues of Rs 25 crore during the year ended March 31, 2022, 57% higher from FY21. The startup saw its losses widening almost threefold to Rs 54.6 crore during FY22, compared to Rs 18.3 crore in FY21.
Info Edge’s management however remained upbeat about investments in startups. Speaking to analysts during the post-earnings call, Info Edge promoter and executive vice-chairman Sanjeev Bikhchandani said that it was a good time to invest in startups in India if one had a “8-10 year horizon”.
Bikhchandani’s comments come at a time when the Indian startup ecosystem has been reeling under a slowdown in funding following the boom period of 2021. The Indian consumer tech ecosystem is also witnessing several markdowns by crossover funds with unicorn startups such as Swiggy, Byju's, Pine Labs, PharmEasy having their valuations slashed by these investors.
Bikhchandani said it was difficult to predict when the ecosystem would turn around, but said that Info Edge was being “particular about the valuations, the entrepreneurs and cost-efficiency” while making its investment calls. Info Edge has backed several consumer internet startups such as food and grocery delivery company Zomato, financial services aggregator Policybazaar, edtech platform Adda24x7, and several others.
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