Yubi (formerly CredAvenue) grabbed wide attention when Vivriti Capital sold a part of its stake in the digital lending company at a valuation of $1.5 billion. Even as Vivitri made a fortune after the secondary transaction, the firm’s bottom line worsened, by 8X in the fiscal year ending March 2023.
We will dive deeper into the company’s expenses pattern, which is responsible for its steep losses later in our analysis. For now, let’s review its collection streams.
Yubi’s revenue from operations surged 98% to Rs 328 crore in FY23 from Rs 166 crore in FY22, its consolidated financial statements filed with the Registrar of Companies show.
Yubi is a debt platform that connects businesses with banks and NBFCs. The company offers six distinct products including a lending marketplace, a supply chain financing marketplace, and dedicated real estate and infrastructure financing solutions.
With 6,200 investors and over 17,000 active enterprises on board, Yubi claims to have facilitated credit worth Rs 1.4 lakh crore.
Income from merchant banking and other allied services provided to corporate borrowers and debt investors formed 54% of the total revenue. Commissions on debt facilitation, collection solutions and data collection were other revenue drivers for Yubi.
Check TheKredible for the detailed revenue breakup.
Similar to the other technology startups, Yubi’s employee benefits accounted for 48% of the overall expenses. This cost surged 4.7X to Rs 432 crore in FY23 from Rs 92 crore in FY22. This expense also included Rs 109 crore as ESOPs cost (non-cash in nature).
Yubi’s business supports services, information technology, traveling, legal/professional, and marketing costs took its overall expenditure up by 314% to Rs 895 crore in FY23 from Rs 216 crore in FY22.
Expenses Breakdown
https://thekredible.com/company/yubi-credavenue-/financials
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https://thekredible.com/company/yubi-credavenue-/financials
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- Employee benefit
- Business support service
- Information technology
- Travelling conveyance
- Legal professional
- Advertising promotional
- Others
Head to TheKredible for a complete expense breakdown.
At the end, Yubi’s losses increased by 745% to Rs 482 crore in FY23 from Rs 57 crore in FY22. Its ROCE and EBITDA margin worsened -30% and -105%, respectively. On a unit level, the Chennai-based company spent Rs 2.73 to earn a rupee of operating revenue during FY23.
FY22-FY23
| FY22 | FY23 |
| EBITDA Margin | -8% | -105.1% |
| Expense/₹ of Op Revenue | ₹1.30 | ₹2.73 |
| ROCE | -2% | -30% |
Rs 328 crore is probably a very small, if not fraction of where Yubi wants to be, operating in a market as vast as the debt syndication market in India. While it is too early to judge it for its operating metrics, the assumption is that having arranged credit of almost $18 billion, the firm will have picking up learnings and data along the way that continue to make it better at its job. It’s a market where seasoning, or time spent in the market matters, and 3 years or more is the minimum one would give before deciding if a firm has it to last. Of course, competition is intense, as is the risk of disintermediation that always hangs in this business, even as the proliferation of platforms like Yubi, Lendingkart etc has probably proven that it is one risk that is overhyped.
