Fintech firm BankBazaar is eyeing an IPO by 2024 and claims to have touched Rs 160 crore in revenue and EBITDA profitability for FY23. Although a detailed analysis would be possible once it files annual financial statements for FY23 with the RoC, it’s worth noting that during FY22 the company’s scale grew 50% while also being able to cut losses.
BankBazaar is a credit card issuer. It also checks your credit score, and cross sells third-party loans as well as insurance products. The commission earned from the banks on the basis of customer application on its platform was the sole source of revenue for BankBazaar which grew 50% to Rs 95.52 crore in FY22.
The company also earned income from the interest on fixed deposits, which shrank 76% to Rs 1.2 crore in FY22, according to BankBazaar’s consolidated financial statement with the RoC.
On the expense side, employee benefit was the largest burn, which formed 57.6% of the overall expenditure and surged 3.4% to Rs 80.65 crore in FY22 from Rs 77.98 crore in FY21. The marketing and information technology cost spiked 24.3% and 58.9% respectively to Rs 22.29 crore and Rs 8.77 crore during FY22.
BankBazaar spent another Rs 10.78 crore and Rs 5.3 crore on outsourced manpower and telephone postage, pushing the total expenses to the tune of 10.2% to Rs 139.96 crore in FY22.
In the end, BankBazaar’s losses dwindled by 25.8% to Rs 43.23 crore in FY22 from Rs 58.25 crore in FY21. Its ROCE and EBITDA margin stood at -656.37% and -38.37% during FY22. On a unit level, it spent Rs 1.47 to earn a single rupee.
As an early entrant in the fintech space, BankBazaar has witnessed the market evolve from promise in 2007 to actually delivering on its potential. But like many first movers, it has also had to watch a trickle of competition for its opportunity turn into a scramble for business as the market exploded. It is questionable whether the firm has made a strong enough brand, or any other moat that will provide it a long term advantage. Even strong relationships can count for little with so many new players moving in at every end of the chain. Founders will also feel the additional pressure of turning a profit after such a long time, and one certainly hopes they have a plan to justify the long wait.
