Instamojo's impact report of FY19 highlights importance of value creation

About half a year ago in September 2018, Entrackr had covered Instamojo’s plans around mojoXpress and mojoCapital. At that time, Sampad Swain, the CEO, and co-founder of the SME payments solution platform told us about the goals they aimed to achieve by the end of FY19.

Swain, a couple of days ago in a company blog post gave the details around what progress was actually made during the year, how much the new features launched around that time contributed to the growth and what are the company’s plans now onwards.

In September, Swain had told Entrackr that the company aims to achieve an annual Gross Merchandise Value (GMV) run rate of $250 million by the end of FY19 with about a billion GMV generated during the period. While the latest report does not mention the exact GMV run rate or the total GMV for the fiscal year, it claims that the figure has grown 92%.

This growth in GMV was achieved on the basis of 78% growth in the number of transactions and a 19% increase in the size of transactions.

These transactions were made by over 700,000 merchants that company counts as part of its platform, a little short of the 1 million merchant partner plan. The growth in the number of total merchants is about 85% from the past fiscal and the company currently claims to be adding one merchant almost every minute.

In Q4 FY19 alone, it had added 100,000 plus such members. At this rate, the company is about 3 months - a quarter - away from the million merchant figure.

About 30% of these members - over 250,000, as the company claims, are active merchants. This a 70% growth in the number of active users from FY18.

Average revenue that the company generates via these users has also grown by over 50%, and the net payback period for them is normalised at 3-4 months.

As far as the value-added services (VAS) - mojoPayments, mojoXpress, and mojoCapital were concerned, these have driven 11% of the firm’s revenue since their launch.

Given that they are only six months old products, their double-digit contribution in topline appear impressive.

mojoXpress, the shipping and logistics service counts for 8% revenue alone with over 1,000 shipments in a month. In the latter half of FY19, after its launch, mojoCapital - a sachet working capital loan provider to small businesses - has lent over Rs 60 crore with 0.02% Non Performing Assets.

While this does not give a direct overview of the financial performance on the company in FY19,  is all is as it seems on the basis of this impact, the performance is liable to improve even further in the fiscal.

In FY18 itself the firm had shown tremendous improvement in the financial statements, and looked to be well on its way towards break even. It had seen a 2.6X jump in revenue to Rs 16.36 crore and the losses had almost halved to a minimum of Rs 11.61 lakhs.

Again a very important point that numbers can only hint at is the fact that they were a result of the company's attempts at creating value for small businesses.

Swain started the company with a plan to create digital handling, payment, and a few other aspects of the business easier for these capital light firms that struggle with technology.

When he created that value, a positive impact followed - for both the company and the merchants.

The impact created by Instamojo on the market certainly explains why fintech has been one of the key segments in the startup ecosystem and an investment magnet. No wonder, the company bagged a $7 million Series B round led by Anypay in January this year.

What remains to be seen now is the kind of impact this impact had on Instamojo’s FY19 financial reports.

For Instamojo, the future goal is to onboard over 1.3 million merchants on the platform in FY20, go bullish on the mobile platform, launch more VAS like commerce, payments, and lending, and create communities for MSMEs.