B2B e-commerce platform Power2SME has demonstrated decent growth with better unit economics as reflected in its top and bottom lines in the fiscal year ending March 2023. While it managed a 50% growth in gross margin in FY23, the company also reduced losses by 9% as it slashed employee benefits among other costs.
Power2SME’s gross revenue spiked to Rs 1,056 crore in FY23 from Rs 703 crore in FY22, its consolidated financial statements filed with the Registrar of Companies (RoC) show.
Power2SME provides raw materials such as steel, chemicals, inks, paints, metals, polymers along with financial services to SMEs to fulfill their capital needs through its subsidiary entities.
Income from the sale of goods contributed 99% of the total gross revenue whereas the rest of the collections came from interest and finance (operating). The company also made Rs 6 crore from interest on current and non-current investments (non-operating) which took its total revenue to Rs 1,063 crore in FY23.
For the e-commerce platform, the cost of procurement comprised 93.4% of the total expenditure. Tracking the growth in scale, this cost grew by 49.6% to Rs 1,019 crore in FY23 from Rs 681 crore in FY22.
Its employee benefits, insurance, legal/professional, advertising, finance, and other overheads took the overall expenditure to Rs 1,091 crore in FY23 from Rs 740 crore in FY22.
View TheKredible for the complete expense breakdown.
Expense Breakdown
https://thekredible.com/company/power2sme/financials
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https://thekredible.com/company/power2sme/financials
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- Cost of materials consumed
- Employee benefit
- Insurance
- Legal professional
- Advertising promotional
- Finance
- Others
The decent acceleration and cost control enabled Power2SME to reduce its losses by 9% to Rs 28.5 crore in FY23. Its ROCE and EBITDA margin improved to -10% and -0.6% respectively. On a unit level, it spent Rs 1.03 to earn a rupee in FY23.
FY22-FY23
| FY22 | FY23 |
| EBITDA Margin | -3% | -0.6% |
| Expense/₹ of Op Revenue | ₹1.05 | ₹1.03 |
| ROCE | -24% | -10% |
Power2SME last raised its equity round of $36 million in January 2018 and has raised around $80 million to date. According to startup data intelligence platform TheKredible, Accel is the largest stakeholder with 26.1% followed by Kalaari Capital and Inventus Capital. Its co-founder and CEO Narayan Ramaswamy commands 12.17% of the company at the moment.
With its last funding round in 2018, Power2Sme is certainly straining to deliver on its promise, and the current growth momentum should necessitate a round of funding soon. That it hasn’t yet gone for the most obvious growth hack, i.e., lending to its users is interesting, and might just be the next focus area yet. But the significant scale and operating breakeven suggests big things soon at the firm. We are betting you will find yourself back here soon enough to read an important update on the firm.
