Business-to-business (B2B) contract manufacturing unicorn Zetwerk did not have to rework its operational strategies to survive the funding winter and fears of a recession in its global markets, according to cofounder and chief executive officer (CEO) Amrit Acharya.
“We're in business as usual. There is no change in how we operate,” said Acharya, in a recent episode of CNN News 18’s show Bits to Billions.
In the face of an increasing global shift from growth-led businesses to profitable businesses, Acharya's remarks come as many founders are trying to cut costs by restructuring and laying off in masses.
Acharya said that the company is not looking to carry out layoffs as it is well capitalised having raised close to $500 million over the last four years. Acharya added, “And most of it (fund raised) is in the bank. So we're in a good place.”
Zetwerk is also profitable on an EBITDA basis (Earnings Before Interest Taxes Depreciation Amortisation), a metric for operating profits. Zetwerk had earlier told Moneycontrol that its revenue nearly tripled from Rs 360 to Rs 949 crore for FY21 and that it aims to quadruple revenue by FY22.
“While we also grew a lot last year, we grew profitably. And hence, in some way, destiny is under our control because we can now choose to go aggressive or not, without relying on extreme measures,” he said.
Acharya, however, added that the company is not entirely insulated from the current bust cycle in the ecosystem as it witnesses a difference in the pace at which some of its US (United States) customers are now doing business with them, compared to the last year. The timid levels of business for the company follow reports of a strong likelihood of recession starting in the US in the fourth quarter of 2022.
However, he said, “Our idea is to build a resilient business, where each of these things by themselves don't significantly affect the business.”
With diversifying the business to various sectors and geographies, Zetwerk stays fairly strong when business sentiments slow down in a few of its markets, according to Acharya.
“While there is a recession, there is no recession that is universal across all sectors and geographies we serve. We have a lot of natural hedges.”
He added, “We are also big in India. There are times when the US will be very strong, which is what we saw last year. This year the US maybe is a little bit soft, but that's when our India business kind of takes over.”
Acharya said the company is now diversifying into Middle East and Europe too.
The company marked its entrance into the coveted unicorn club in August, last year, raising $150 million led by D1 Capital Partners, valuing it at $1.33 billion. A unicorn is a startup valued at over a billion dollars.
Currently, the company said it is valued at $2.7 billion.
Also Read: B2B unicorn Zetwerk announces 3 acquisitions worth Rs 100 crore
On July 7, the company announced the elevation of its finance head Ankit Fatehpuria to the co-founder position, making him the fifth in the team with Acharya, Srinath Ramakkrushnan, Rahul Sharma and Vishal Chaudhary.
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