Marketing automation platform WebEngage raised $20 million in Series B round in August last year. The funding also pushed the firm’s valuation in the range of $100 million which was followed by two-fold growth in its operating revenue in the last fiscal year.
WebEngage’s collection from operations flourished 2X to Rs 98 crore during the financial year ending March 2022 as opposed to Rs 49 crore in FY21, according to its consolidated annual financial statements with the Registrar of Companies (RoC).
WebEngage’s services comprise subscription services, technical partnership sales, and online sales of marketing automation services. Collection from these solutions was the only source of operating revenue for the company during FY22.
The Mumbai-based company also earned Rs 40 lakh from interest on deposits and other non-operating income.
Founded by Avlesh Singh and Ankit Utreja in 2011, WebEngage provides marketing automation services to consumer internet companies to make user engagement and retention simplified and effective. As per its website, it has more than 400 million monthly active user engagement, and helped clients generate an additional $10 billion in revenue.
On the expense side, technology sharing stood as the biggest cost element, forming 27.7% of the total expenditure. This cost shot up 3.5X to Rs 31.98 crore in FY22 from Rs 9.1 crore in FY21. During FY22, the company increased its workforce to harness growth and this could be noticed from its employee benefits expenses which ballooned 94% to Rs 28.5 crore in FY22 from Rs 14.7 crore in FY21.
Meanwhile, server hosting and software expenses rose 26% and 192% respectively to Rs 23.3 crore and Rs 3.56 crore during FY22. WebEngage also doubled its spending on advertising & promotional activities to Rs 8.53 crore which led to a 98.8% hike in overall expenditure to Rs 115.3 crore in FY22.
With about a two-fold jump in revenue and expenses, WebEngage’s annual losses also surged 76.8% to Rs 16.85 crore at the end of FY22. The company’s operating cash outflows also rose to Rs 12.21 crore in FY22.
Its EBITDA margin depressed by 741 BPS to -9.47% in FY22 which could be ascribed to rising technology and promotional expenses. On a unit level, WebEngage spent Rs 1.18 to earn a rupee of operating income during the last fiscal year.
In a B2B business of this kind, one would have to expect that losses are a temporary blip, as the firm aligns itself to a faster growth path. While competition is ever present, firms like WebEngage have the added advantage of a strong domestic as well as global market potential with the services they provide.