Progcap Fintech Growth and Financial Performance
Progcap, a fintech firm supported by Peak XV and Tiger Global, has experienced remarkable growth, scaling over 5X in the last two fiscal years. The company’s revenue surged from Rs 26 crore in FY22 to Rs 139 crore in FY24. Additionally, Progcap successfully managed to decrease its losses during this timeframe.
Revenue Growth of Progcap
According to its financial statements, Progcap’s revenue from operations nearly doubled, reaching Rs 139 crore in FY24 from Rs 71 crore in FY23, as reported by the Registrar of Companies (RoC).
Services Provided by Progcap
Progcap specializes in providing debt capital to underserved micro and small businesses. The fintech platform enhances supply chain digitization and improves access to finance for last mile retailers. Revenue generated from these services constituted the company’s primary income source.
Additional Income Sources
The company also earned an extra Rs 20 crore through interest on deposits and gains on current investments, bringing its total income to Rs 159 crore in FY24, compared to Rs 102 crore in FY23.
Expense Overview
On the expenditure front, employee benefits constituted the largest segment of costs, representing 61% of total expenses, amounting to Rs 124 crore in FY24. This cost increased by 15% year on year. Furthermore, the company’s finance costs saw a significant rise to Rs 22.5 crore from merely Rs 1 crore in FY23. Other substantial expenses accounted for included collection deficiency charges at Rs 9.5 crore, travel costs at Rs 6 crore, and numerous miscellaneous expenses.
Total Expenses
Overall, Progcap’s total expenses escalated by 36%, reaching Rs 203 crore in FY24, up from Rs 149 crore in the previous fiscal year.
Profit and Margin Analysis
Progcap managed to reduce its losses by 6%, from Rs 49 crore in FY23 to Rs 46 crore in FY24. The company’s Return on Capital Employed (ROCE) and EBITDA Margin improved, registering at -2.96% and -11.32%, respectively. On a unit basis, Progcap incurred costs of Rs 1.46 for every rupee earned in operating revenue during FY24.
Current Assets and Funding
As of FY24, the Delhi-based firm reported current assets valued at Rs 1,321 crore, which included Rs 163 crore in cash and bank balances.
Funding Overview
According to various reports, Progcap has successfully raised approximately $112 million in funding to date, with Tiger Global, Peak XV, Creation Investments, and GrowX Ventures acting as the lead investors. The co-founders, Pallavi Shrivastava and Himanshu Chandra, collectively own a 23.41% stake in the company.
Market Position and Future Prospects
In a country lacking adequate capital resources, many firms that aim to serve the most underserved sections of the commercial market have found their niche in providing financial services. Progcap has adeptly targeted this segment with its offerings right from the beginning. This strategic direction positions the company well for future growth, although the substantial losses incurred thus far remain somewhat disproportionate and uncharacteristic compared to conventional lending business models within the MSME sector. It seems that Progcap has invested significantly to gain the necessary experience to enhance its operations moving forward. The considerable funding received suggests ambitious plans for the future, making it a company to watch in terms of its performance in FY25.
