Info Edge has written off its entire investment in B2B marketplace Bijnis, worth Rs 76.6 crore, the company said when it filed its results for the last quarter of FY23. This is the second such writedown by the company, after it wrote off Rs 276 crore of its investment in Rahul Yadav-backed 4B Networks in the previous quarter.
Info Edge stated in its filing that it has written off the investment because it has lost its inherent value and that raising future capital is uncertain.
Info Edge is the largest shareholder in Bijnis, holding 26.27 percent.
It said that it was written off "following the principles of conservatism and prudence and after due consideration of factors including continuing cash burn, limited availability of cash in proportion to unspecified liabilities with respect to buyback obligations (including liquidation preference) of the Company towards investors under the Shareholders Agreement and uncertainty of future capital raise in such a situation, in the subjective judgement of the management, the investment has lost its inherent value."
Rishabh Katiyar, part of the investment team as Principal at Info Edge Ventures, said in a statement that the write-off of Bizcrum Infotech, the parent company of Bijnis, is a technical write-off due to unspecified liabilities which "may materialise owing to the buyback obligations in the existing shareholders’ agreement signed between the company and the investors."
"This liability is contingent in nature and has been factored in based on the conservative accounting policies followed by the company in compliance with IndAS accounting standards," it said, stressing that the write-down was not a reflection on the company’s financial performance, the market opportunity and the value proposition.
"Further, this liability would only materialize if the company is unable to provide an exit to the key investors via other exit mechanisms like third party sale, listing, among other mechanisms captured in the agreements by a specified date in future and all the key shareholders together choose to exercise the buyback right as an exit mechanism," Katiyar said.
Bijnis is backed by Matrix Partners, Sequoia Capital India as well as Westbridge Capital. It last raised $30 million in September 2021 in its Series B round, and has raised $43.5 million so far. Among its angels, it also counts OfBusiness founder Asish Mohapatra, Oxyzo's co-founder Ruchi Kalra, and Zomato founder Deepinder Goyal.
In FY22, Bijnis reported a 57 percent increase in its operating revenue to Rs 25.1 crore from a year earlier. But the company's employee costs surged over threefold during the period, dragging the company into deeper losses amounting to Rs 54.6 crore. In FY21, the company had a loss of Rs 18.3 crore.