Zetwerk, a contract manufacturing startup, saw its total gross merchandise value (GMV) grow 35 percent from Rs 13,050 crore (around $1.6 billion) in FY23 to Rs 17,564 crore (about $2.1 billion) in FY24. For a company like Zetwerk, GMV is the sum of the total operating income and the goods and service tax (GST).
Without including the GST component, the Bengaluru-based firm had operating revenue of around Rs 14,450 crore in FY24, a 26 percent increase from Rs 11,450 crore clocked in FY23.
The company’s business is fueled by government expenditure, private investments and more factories being set up. “Our revenue largely comes from people spending money in manufacturing, and that is probably at all-time highs because of which we scaled,” CEO and co-founder Amrit Acharya told Moneycontrol in an interview.
Companies choosing India as their manufacturing hub to diversify beyond China, as part of the China plus one policy, also worked in Zetwerk’s favour. “From a macro point of view, this is probably the best time we've seen, and it looks like it’s here to stay. The reshoring of China plus one will happen only once in our lifetime, and it is happening today,” Acharya said while adding that the trend is especially highlighted in the US, which brings in about 20 percent of the company’s revenues.
Zetwerk deals in electronics, automobiles, aerospace, defence, IT hardware, and renewables, including components for electric vehicles (EVs), and more. Going forward, Zetwerk will focus on renewables, electronics, and aerospace & defence, as the three industries together account for 30-35 percent of the company’s revenues and the share is only projected to grow further.
The Bengaluru-based company will continue to compound at an annual growth rate of 30-35 percent over the next 2-3 years, as per Acharya who is not in a hurry to turn the company profitable. Zetwerk will instead continue to invest in the business.
In FY23, Zetwerk incurred a loss of Rs 109 crore, up from Rs 60 crore in FY22. While Acharya did not shed light on how much loss it recorded in FY24, he said the company will be loss-making in the near term.
“Our current investment plans may come at the cost of some short-term erosion, which is conceptually fine with us and our shareholders,” Acharya said in the interview.
“We will continue to focus on operating profits or EBITDA,” he added. Zetwerk recorded Rs 191 crore of Adjusted EBITDA from operations, as against Rs 188 crore in the year ago period.
Fundraising
Zetwerk has raised a total of $90 million (Rs 760 crore) across multiple rounds this year from Khosla Ventures, IndiGo Airlines’ co-founder Rakesh Gangwal, public market investor Baillie Gifford and others at a valuation of $3.1 billion, up from $2.8 billion previously.
The company may also extend its round further.
The talks of potential fundraises come after reports suggested that Zetwerk is looking to go public with a $1 billion IPO in 18 months.
Asked if the company would raise more money, Acharya said, “I would say we are broadly done, but if we find some very great like-minded folks to work with, then we will not say no.”
Since being founded in 2018, Zetwerk has raised over $750 million from Accel, Lightspeed, Peak XV Partners, and several others.
"We are pretty happy with what we have right now," Acharya concluded.
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