Fintech Firm BillDesk Sees 5% Profit Dip in FY23, Revenue Closer to INR 3,000 Cr

BillDesk logo

Three points you will get to know in this article:

  • BillDesk’s net profit declined by 5% in FY23.
  • Operating revenue grew by 10%, reaching INR 2,678.3 Cr.
  • Technical costs surged by 9%, constituting 84% of expenses.

Introduction BillDesk

BillDesk is a reputable fintech firm that specializes in providing financial solutions for businesses in the B2B sector. Utilizing technology, companies like BillDesk streamline traditional financial processes, making them more efficient, accessible, and cost-effective. BillDesk offers platforms for billing, payments, and financial operation management tailored to meet the specific needs of businesses. Overall, BillDesk’s services are geared towards optimizing and simplifying financial processes for businesses, enabling them to operate more efficiently and effectively within the digital landscape.

Financial Performance Decline at BillDesk

BillDesk, a leading B2B fintech company based in Mumbai, continues to experience a drop in its overall net profit. The company, considered a unicorn in its field, witnessed a 5% decline in net profit, totaling INR 141.9 Cr during the financial year 2022-23 (FY23), compared to INR 146.9 Cr in the preceding fiscal period.

In the previous fiscal year, FY22, BillDesk observed a significant 39% decrease in net profit from INR 245.5 Cr.

Established in 2000 by three former Arthur Andersen executives—M N Srinivasu, Ajay Kaushal, and Karthik Ganapathy—BillDesk primarily generates revenue through transaction processing fees, e-top up services, and fees from loyalty points redemption.

Revenue Growth and Spike in Expenses

In the financial year 2023, BillDesk’s operating revenue increased by 10% to INR 2,678.3 Cr from INR 2,442.8 Cr in the previous fiscal year.

When including other income, total revenue also saw a 10% growth, reaching INR 2,765.4 Cr from INR 2,513.8 Cr in FY22.

In the fiscal year FY23, BillDesk saw a significant rise in its overall spending, shooting up by 12% to reach INR 2,561.5 Cr compared to INR 2,295 Cr in FY22.

When we dive into the specifics, technical costs took the lion’s share, encompassing various operational expenses such as bank fees, service charges, data and communications, and verification costs. These technical expenditures surged by 9% to INR 2,146.3 Cr in FY23, constituting a whopping 84% of the total expenses. The preceding fiscal year, FY22, witnessed a sum of INR 1,963.6 Cr allocated under this category.

Employee Expenses Surge and Workforce Expansion

On the other hand, employee expenses witnessed a noticeable uptick. The startup dedicated INR 245 Cr towards employee benefits during the fiscal year under scrutiny, marking a 35% increase from the INR 181 Cr expended in the previous fiscal year. This upsurge not only signifies a considerable rise in expenditure but also hints at an expansion in the company’s workforce.

Competitive Landscape and Industry Challenges

BillDesk provides a range of digital payment solutions, including payment gateway services, to businesses. It faces competition from companies like Razorpay and Citrus Pay.

Razorpay saw a significant uptick in revenue, with a 54% increase year-on-year, reaching INR 2,279.3 Cr in FY23. Despite this growth, its losses only decreased by 1% to INR 7.3 Cr.

Missed Acquisition Opportunity with PayU

Back in 2021, there was buzz when Prosus, a renowned global consumer internet group operating PayU, announced plans for PayU to acquire BillDesk for a hefty $4.7 Bn. However, the acquisition fell through last year due to certain conditions not being met, despite having gained regulatory approval.

BillDesk, a prominent B2B fintech unicorn based in Mumbai, faced a decline in net profit by 5% in FY23 after a substantial 39% drop from the previous year. Despite a 10% revenue growth, their spending surged by 12%, predominantly driven by technical costs. Employee expenses rose by 35%, hinting at potential workforce expansion. Competing with companies like Razorpay and Citrus Pay, BillDesk navigated industry challenges. The anticipated acquisition by Prosus’s PayU for $4.7 Bn fell through in 2021, emphasizing BillDesk’s independent strategic positioning.Top of Form

Karan Balodi

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