Yubi, formerly known as CredAvenue, is making waves in the financial technology sector, showcasing impressive growth and strategic improvements in its financial performance for the fiscal year 2023-24 (FY24). The company, which operates as a debt platform for enterprises, banks, and fintech firms, has reported a 47.6% growth in its revenue from operations, reaching Rs 484 crore. At the same time, Yubi has managed to reduce its losses by 22%, highlighting its operational efficiency and cost-cutting measures.
Yubi’s Revenue Soars to Rs 484 Crore in FY24
Yubi’s operating revenue surged to Rs 483.7 crore in FY24, a significant jump from Rs 327.57 crore in FY23. This impressive growth is attributed to the company’s expanding product offerings, which include a lending marketplace, supply chain financing, and real estate and infrastructure financing solutions. Yubi’s diverse range of products has helped the company cater to a broader base of clients, including banks, fintechs, non-banking financial corporations (NBFCs), and other enterprises.
The company’s revenue is driven by its platform services, which contributed about 45.6% of the total income, amounting to Rs 220.54 crore. In addition to platform services, Yubi generated Rs 133.95 crore from collection revenue (interest earned on loans), and Rs 89.38 crore from fee-based services. Yubi also made Rs 44.46 crore from corporate database offerings, highlighting its strong foothold in the digital financial services ecosystem.
Cost Optimization Drives Loss Reduction
Despite the significant increase in revenue, Yubi managed to bring down its losses by over 22% to Rs 395.8 crore in FY24, compared to Rs 509.83 crore in FY23. The company’s focus on operational efficiency and cost optimization played a crucial role in this achievement. Notably, Yubi’s largest cost item was employee benefits, which dropped by 12.1% year-on-year, amounting to Rs 379.98 crore.
However, some costs did increase, particularly depreciation and amortization, which saw a 66.5% rise, amounting to Rs 134.05 crore. Additionally, other operational expenses, including IT and marketing, rose by 9.4%, totaling Rs 405.09 crore in FY24. Despite these increases, Yubi’s cost management strategies helped keep its overall spending under control.
Yubi’s total expenditure for FY24 stood at Rs 938.82 crore, reflecting a modest 1.7% year-on-year increase. This increase in spending is primarily attributed to Yubi’s ongoing expansion and investment in technology and marketing efforts to scale its platform.
Challenges Remain, But Yubi Is on the Right Track
While the company is showing positive financial momentum, Yubi’s return on capital employed (ROCE) and EBITDA margins remained in the negative, with figures of -29.28% and -39.74%, respectively. This indicates that while Yubi is growing, it is still in the process of building long-term profitability and efficiency.
On a unit basis, the company spent Rs 1.94 to generate every rupee of operating revenue in FY24, highlighting the challenges it faces in achieving sustainable profitability. Nevertheless, the reduction in losses and the continued revenue growth suggest that Yubi is on a path to improving its financial health.
Yubi’s Unicorn Status and Investment Backing
Yubi’s financial performance comes on the heels of its unicorn status. In March 2022, the company raised a $135 million Series B round, led by Insight Partners, Dragoneer Investment Group, and B Capital Group, which valued the company at $1.5 billion. This valuation was confirmed after a secondary sale of shares.
In a further show of confidence in the company’s potential, Gaurav Kumar, Yubi’s founder and CEO, invested Rs 250 crore ($30 million) in equity capital in the company in August 2023, further strengthening the firm’s financial foundation.
It’s also worth noting that Yubi’s NBFC arm, Vivriti Capital, holds just over 50% of the company’s equity, ensuring a close alignment between the two entities as they continue to scale operations.
What’s Next for Yubi?
As Yubi continues its growth journey, the company has its eyes set on expanding its footprint in India’s debt and financing markets. With its expanding suite of services, including solutions for debt restructuring, credit assessment, and collections, Yubi is positioning itself as a key player in the digital finance space.
The platform’s focus on operational efficiency and cost management will remain crucial as it aims to improve its bottom line and achieve sustainable profitability in the coming years. With strong backing from investors, and a growing customer base, Yubi is poised to make significant strides in the Indian financial ecosystem.
Key Takeaways:
- Yubi’s Revenue: 47% growth in operating revenue, reaching Rs 483.7 crore in FY24.
- Cost Optimization: Reduced losses by 22%, with focus on operational efficiency.
- Investor Confidence: Secured unicorn status and strong backing from investors like Insight Partners and Gaurav Kumar.
- Challenges Ahead: Still working towards profitability, with negative ROCE and EBITDA margins.
- Future Prospects: Expansion into debt restructuring, credit assessment, and other financial services, with a focus on continued revenue growth and operational efficiency.
Conclusion: A Promising Future for Yubi
Yubi’s growth in FY24 marks an important milestone for the company. While the road to profitability remains challenging, the firm’s impressive revenue growth and effective cost management highlight its potential to become a major player in India’s debt and financing ecosystem. With strong investor backing and a growing suite of products, Yubi is positioned for continued success in the future.
