Tracxn joins IPO bandwagon: The numbers that matter

The race to successful IPOs is adding new players every week, and one might add, some really interesting ones too. After hyper-funded companies including Zomato, Paytm, PolicyBazaar, Nykaa and CarTrade, it’s Bengaluru-based analytics platform Tracxn that is planning to join the bandwagon.

Tracxn has passed a special resolution to convert itself to a public entity and renamed itself to Tracxn Technologies Limited, regulatory filings show.

In doing so, it follows another relatively small startup, travel aggregator Ixigo, that had also converted itself into a public limited company and is in the process of filing its draft red herring prospectus or DRHP soon.

On Thursday, a CNBC TV18 report highlighted that Tracxn is planning to go public soon. However, it did not disclose the actual IPO size of Tracxn.

Further Tracxn has a special resolution to allot bonus shares to its existing shareholder Sequoia. The storied VC firm will be allotted bonus shares in the ratio of 52:1. In total, it was allotted 24.1 lakh equity shares. 

Founded by Abhishek Goyal and Neha Singh, the eight-year-old company tracks startups and private companies spread across sectors. Funded by the likes of Accel Partners, Sequoia and Elevation Capitaland several others, Tracxn claims to have more than 6,000 subscribers across more than 40 countries around the world.

It’s worth noting that in the current ‘batch’ of prospective IPO bound firms, Tracxn has raised the lowest funding amounts before its date with the public markets, if it happens. According to Fintrackr’s data, the company has raised around $17 million or Rs 125 crore to date and was valued at around $78 million or Rs 580 crore during its last funding round in November 2019.

For the fiscal year ending in March 2020, the company recorded a 12.4% jump in operating revenue which grew from Rs 33.2 crore in FY19 to Rs 37.33 crore in FY20. During the same period, its annual costs also increased by 9% to around Rs 61 crore. 

Tracxn saw its annual losses reduce by 11% to Rs 19.3 crore in FY20. 

A decoding of Tracxn’s current shareholding structure by Fintrackr reveals that Sequoia has emerged as the largest stakeholder with 53.62% equity followed by Elevation Capital with 9.86% stake. Co-founders Singh and Goyal control 12.07% stake each in the company. The complete shareholding can be seen below.

In the past couple of months, around half a dozen companies have revealed their plans for an  IPO and filed DRHP for the same. While foodtech giant Zomato has already made it to the stock exchange, Paytm, Mobikwik and PolicyBazaar are in the pipeline with plans to raise Rs 16,600 crore, Rs 1,900 crore and Rs 6017.5 crore respectively. Cosmetics marketplace Nykaa had also filed its DRHP to raise around Rs 4,000 crore via IPO.

Meanwhile, mobility major Ola and automobile marketplace Droom are also planning for a public listing by early next year. According to Entrackr’s sources, Ola has started talking to bankers for a potential IPO in the next six to eight months. 

While Tracxn’s public issue is likely to be small considering its scale, it might yet open the doors for a whole new set of firms in a similar revenue bracket or growth stage to consider going public too. Importantly, market analysts aver that an IPO might simply be a way to acquire a currency for acquisitions (its stock), or find a ‘fair’ valuation for the business for a possible acquirer in other cases.  

Disclosure: Entrackr operates in a segment that has a major overlap with Tracxn, and offers products, including Fintrackr, that possibly compete with the firm.