Fintech startup Easebuzz doubles revenue to Rs 236 crore in FY23 as demand surges

Easebuzz is looking to raise around $25-$30 million in funding.

Digital payments solutions provider Easebuzz has doubled its revenue to Rs 236 crore in FY23 as it has witnessed a significant increase in its demand after the Reserve Bank of India’s direction to some of its competitors like Razorpay to pause on-boarding new merchants since December 2022 as well as by tapping on the Business-to-Government (B2G) segment.

“We closed our financial year with revenues of around Rs 236 crore and we have generated an Ebitda which is about Rs 4 crore and net profit is also around Rs 95 lakh…We have always been a profitable company,” Siddharth Dani, Chief Financial Officer of Easebuzz told Moneycontrol in an interaction.

Easebuzz witnessed a jump in its demand as many businesses were looking for options post the RBI’s directions to players like Razorpay and Cashfree to pause on-boarding new merchants. The firm also recently onboarded Indian Railways Catering and Tourism Corporation as its customer.

“We are actually seeing growth in our business, at least around 5-10 percent month-on-month growth in our business as companies are looking for alternatives…We are very content with business coming our way, but it is very important for the RBI to look after the new merchants we onboard, so sometimes we also refuse to onboard some merchants and do a proper check,” Dani said.

While the startup is looking to clock an annualised revenue run-rate (ARR) of $100 million in the next 12-18 months, the firm witnessed a drop in its profitability from FY22 to the current financial year.

As per data available in Tracxn, Easebuzz had reported a net profit of Rs 23 crore in FY22, which fell to Rs 95 lakhs in FY23.

“Overall there is a profitability gap in gross level but that is mainly due to a shift in clients who were using UPI last year vs many new merchants using credit cards this year…And we have also invested more in terms of compliance like investing in teams and tech teams for new products,” Dani explained.

Founded in 2016 by Rohit Prasad, Easebuzz is a full-stack technology platform that builds products and services to solve business problems around payment acceptance, payouts, and financial operations. The firm’s APIs like FeesBuzz, EasyCollect, InstaCollect, and Recurri are solving end-to-end payment collection problems of businesses across various sectors.

The Pune-based fintech has a market presence with sector-specific payment solution stacks for Education, eCommerce - D2C & Marketplaces, Real Estate, Travel & Hospitality, and BFSI.

Easebuzz claims to have onboarded around 1,00,000 businesses of varied sizes and scale, including clients like IRCTC, BigBasket, Symbiosis University, MTDC, Akshaya Patra and DLF.

Eyening the lending segment

In the long term, Easebuzz is looking to enter into the lending business.

“We started the process, however, halted it for a while. We have started pursuing it again…We will be starting off with our lending business and it entirely depends upon RBI to clear our applications,” Dani said.

The company plans to set up a separate entity to enter into the lending business in the next 12 months.

The lending business is getting very attractive in India. In the current year, fintech startups like PhonePe, backed by Walmart, and Jar, backed by Tiger Global, have introduced digital lending services. Meanwhile, existing companies with similar offerings are intensifying their focus by strengthening leadership and securing significant funding.

Fundraise and IPO on the cards

Easebuzz has raised only about $4 million to date in its Series A round. The funding happened in March 2021 and saw participation from 8i Ventures, Varanium Capital, and incubator Guild among others. Pine Labs' Amrish Rau and Jupiter’s Jitendra Gupta among others are also among the company’s backers.

Easebuzz is looking to raise around $25-$30 million in funding.

“We are actually in discussion with a few investors and we are in the market looking to raise funds…We are not a cash-burning business and we also have good liquidity so we are not in a rush to raise funds,” Dani said.

The firm is also mulling to hit the public markets in the next four years.

“We are presently making sure our business is compliant with the RBI which is one regulator, going public would mean that we need to also deal with another regulator and we have to be ready for that…business-wise, we are profitable and cash-flow rich,” Dani said.