Nilekani-backed Power2SME sees FY17 revenue rise six-fold in two years

Business-to-business marketplace Power2SME has more than doubled its revenue and reduced its losses by half for the year through March 2017, filings with the Registrar of Companies show.

The Delhi-NCR-based company saw its revenue from operations gallop by 2.5 times to Rs 782 crore in 2016-2017 from Rs 310 crore in 2015-16. Its net loss came down to a little less than Rs 12 crore from Rs 23 crore in the previous financial year.

Power2SME, run by BEBB India Pvt. Ltd, is an online wholesale raw material buying platform for small and medium enterprises. The company buys products at a certain price from the suppliers and sells those to the SMEs by charging a bit more. Hence, along with revenues, the total expenses of the company also grew and stood at Rs 811 crore for 2016-17 as against Rs 333 crore for the same period in the preceding financial year.

Founded by R Narayan in January 2012 with a seed capital of Rs 2 crore, Power2SME raised its first external funding of Rs 10 crore later that year from Inventus Capital Partners and Kalaari Capital. Narayan took home a salary of Rs 99 lakh.

The company has reserves of Rs 129 crore, while its borrowings stood at Rs 16 crore for 2016-17, the filings noted.

An email sent to the company did not elicit any response at the time of publishing this story.

Six-fold growth in two years

In 2014-15, the company reported revenues of only Rs 129 crore. Since then, its revenue has increased six times and it has even managed to reduce its losses.

Power2SME is one among the large e-commerce companies that is close to achieving profitability. Its revenue is much higher than even unicorns like logistics firm Rivigo, e-commerce firm Shopclues, online classified site Quikr and messaging app Hike and possibly the fastest to hit Rs 800 crore in revenue.

In an interview with VCCircle last September, Narayan said that the company hopes to achieve nearly Rs 1,800 crore in revenue for 2017-18. The company's average transaction value has gone up to around Rs 35-40 lakh per transaction from Rs 12 lakh earlier.

The company has raised total funding of $51 million or Rs 332 crore so far.

It last raised funds in September 2017 in a Series E round from existing investors Inventus Capital Partners, Accel Partners, Kalaari Capital, and Nandan Nilekani. The International Finance Corporation, the private sector investment arm of the World Bank Group, had also invested $10 million into the firm as part of the Series E round; however, the commitment was made in May 2017.

In January 2016, the company raised funds from Infosys co-founder and former UIDAI chairman Nandan Nilekani, who invested in his personal capacity.

The company has three properties­—Power2SME.com, FinanSME.com, and SMEShop.com. It operates out of seven offices and 14 states in India and its current employee strength is 250. It has a registered base of 60,000 SMEs on its platform.

The company offers information and tools that enable SMEs to reduce their procurement costs. It helps SMEs eliminate the need to engage with multiple vendors, provides doorstep delivery of goods through logistics providers, offers flexible payment options, and accepts orders online 24×7. The company is currently catering to industries such as construction, manufacturing, precision engineering, and automotive original equipment manufacturers.

The company's competitors include IndiaMART, Industrybuying and Moglix.

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