Phi Commerce Achieves Significant Growth Amid Increasing Losses in FY24

Phi Commerce, a SaaS-based provider of omnichannel payment solutions, has exhibited a remarkable growth trajectory, doubling its operational scale year-on-year for the fiscal year ending March 2024. Nevertheless, losses have escalated threefold during this period, primarily due to its ambitious expansion strategies.

According to the annual consolidated financial statements submitted to the Registrar of Companies (RoC), Phi Commerce’s operating revenue surged to Rs 81.2 crore in FY24, a substantial increase from Rs 34.7 crore in FY23.

Introduction to Phi Commerce

Phi Commerce is renowned for its digital payment solutions, delivering a cohesive omnichannel payments platform tailored for businesses, banks, and networks. The company’s premier product, PayPhi, streamlines intricate digital transactions across various channels including online, in-store, on-the-go, and doorstep services.

For Phi Commerce, commissions derived from Gross Merchandise Value (GMV) settlements with merchants constitute 90% of its operating revenue, amounting to Rs 72.3 crore in FY24. The residual income is sourced from technological infrastructure and value-added services for payment aggregation.

Financial Performance Overview

Phi Commerce garnered Rs 3.4 crore in interest from fixed deposits and non-current investments, elevating its total revenue to Rs 84.5 crore.

The firm’s expenses surged dramatically, increasing by 137% to reach Rs 116.6 crore in FY24, up from Rs 49.2 crore in FY23. This rise was largely attributed to escalated operational expenses. Processing charges for payment transactions emerged as the predominant cost factor, comprising 60% of total expenses and escalating by 2.6 times to Rs 70.5 crore in FY24. Moreover, employee benefit expenses experienced a significant year-on-year increase of 109%, amounting to Rs 27.8 crore.

Additional expenditures encompassing legal and platform support fees, compensation based on shares to consultants, and various overhead costs contributed to the overall 137% rise in total expenses. Consequently, Phi Commerce’s total costs exceeded revenue growth, resulting in a staggering 207% increase in net loss, widening to Rs 28.9 crore in FY24 from Rs 9.4 crore in FY23.

On a unit basis, the company incurred costs of Rs 1.44 for every rupee earned in FY24.

Key Financial Metrics

As of the close of FY24, Phi Commerce’s Return on Capital Employed (ROCE) stood at a negative -40.18%, with an EBITDA margin of -35.11%. The company’s total current assets were recorded at Rs 107.7 crore, inclusive of Rs 64.6 crore in cash and bank balances as of March 2024.

Funding and Stakeholders

To date, Phi Commerce has successfully raised $14 million in funding, which includes a $10 million Series A round primarily driven by BEENEXT, with participation from Opus Ventures. Reports from various data intelligence platforms indicate that Opus Ventures serves as the principal external stakeholder, followed closely by BEENEXT.