Exclusive: Bizongo raises $50 million funding from existing investors
Synopsis
The funding was raised at a valuation of $980 million, a premium of 63% over August 2022, when it last raised funding, co-founder and CEO Sachin Agrawal told ET.
By Supriya Roy, ETtech
Business-to-business vendor-digitisation platform Bizongo raised about $50 million from its existing investors in a Series-E funding round led by Schroder Adveq, a Zurich-based private equity firm.
Other participating investors included International Finance Corp, Chiratae Ventures, B Capital and British International Investment, he said.
The company, he said, is aiming to post a profit before tax in the fiscal year ending March 2024.
It is currently in advanced discussions on an acquisition, said Agrawal, without sharing specific details. In 2022, Bizongo had acquired two companies: Hexa and Clean Slate Technologies.
The Tiger Global-backed company was founded in 2015 by IIT graduates Agrawal, Aniket Deb and Ankit Tomar. It offers software-based vendor management and supply-chain automation and financing. Over the years, Bizongo has changed its focus on various segments of vendor digitisation, from packaging, textiles and apparel to contract manufacturing.
Currently, the company derives half its revenue by consolidating raw material and purchasing workflows for small and medium-sized vendors and the other half by providing unsecured financing to the same vendors. It has partnerships with more than 40 banks and non-bank financial companies to arrange loans for the vendors.
Also read | Bizongo raises $110 million from Tiger Global, others at $600-million valuation
In terms of raw material, Bizongo has evolved its focus from apparel and packaging to metal over the last two-and-a-half years. Currently, more than 50% of the raw materials bought by SME vendors on its platform are steel and aluminium. Paper and polymer command about 15% volume share each, with the rest coming from yarn and other raw materials.
“We have reduced our dependence on apparel as a sector quite a lot. It was becoming a sizeable portion. But we wanted to diversify and get into more core industries, so we entered new areas and expanded,” Agrawal told ET.
Close to 99% of the 200-300 customers the company acquired in the last two years belong to traditional industries, Agrawal said.
Currently, the company has 450-500 enterprise customers with 7,000-8,000 SME vendors onboarded on its platform, compared with 175 customers and 2,500-3,000 vendors two years ago.
In FY23, Bizongo reported a gross merchandise value of $800 million. It generated about $7-8 million in positive cash flow in the period. Loss remained flat at around Rs 100 crore in FY21, FY22 and FY23. In FY24, net revenue is expected to see moderate 25-30% growth as the company focuses on profitability, Agrawal said.
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The money was raised at a valuation of $980 million, 63% higher compared with the previous round of funding in August 2022, cofounder and chief executive Sachin Agrawal told ET.Elevate Your Tech Prowess with High-Value Skill Courses
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The company, he said, is aiming to post a profit before tax in the fiscal year ending March 2024.
It is currently in advanced discussions on an acquisition, said Agrawal, without sharing specific details. In 2022, Bizongo had acquired two companies: Hexa and Clean Slate Technologies.
The Tiger Global-backed company was founded in 2015 by IIT graduates Agrawal, Aniket Deb and Ankit Tomar. It offers software-based vendor management and supply-chain automation and financing. Over the years, Bizongo has changed its focus on various segments of vendor digitisation, from packaging, textiles and apparel to contract manufacturing.
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Currently, the company derives half its revenue by consolidating raw material and purchasing workflows for small and medium-sized vendors and the other half by providing unsecured financing to the same vendors. It has partnerships with more than 40 banks and non-bank financial companies to arrange loans for the vendors.
Also read | Bizongo raises $110 million from Tiger Global, others at $600-million valuation
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In terms of raw material, Bizongo has evolved its focus from apparel and packaging to metal over the last two-and-a-half years. Currently, more than 50% of the raw materials bought by SME vendors on its platform are steel and aluminium. Paper and polymer command about 15% volume share each, with the rest coming from yarn and other raw materials.
“We have reduced our dependence on apparel as a sector quite a lot. It was becoming a sizeable portion. But we wanted to diversify and get into more core industries, so we entered new areas and expanded,” Agrawal told ET.
ADVERTISEMENT
Close to 99% of the 200-300 customers the company acquired in the last two years belong to traditional industries, Agrawal said.
Currently, the company has 450-500 enterprise customers with 7,000-8,000 SME vendors onboarded on its platform, compared with 175 customers and 2,500-3,000 vendors two years ago.
In FY23, Bizongo reported a gross merchandise value of $800 million. It generated about $7-8 million in positive cash flow in the period. Loss remained flat at around Rs 100 crore in FY21, FY22 and FY23. In FY24, net revenue is expected to see moderate 25-30% growth as the company focuses on profitability, Agrawal said.
