Yubi, the digital lending platform that connects businesses with banks and NBFCs, has reported a strong growth in its revenue for the fiscal year ending March 2023. However, the company also witnessed a sharp increase in its losses, mainly due to higher employee and operational costs.
Yubi’s revenue sources and growth drivers
According to its consolidated financial statements filed with the Registrar of Companies, Yubi’s revenue from operations surged 98% to Rs 328 crore in FY23 from Rs 166 crore in FY22. Yubi offers six distinct products including a lending marketplace, a supply chain financing marketplace, and dedicated real estate and infrastructure financing solutions. With 6,200 investors and over 17,000 active enterprises on board, Yubi claims to have facilitated credit worth Rs 1.4 lakh crore.
The majority of Yubi’s revenue came from merchant banking and other allied services provided to corporate borrowers and debt investors, which formed 54% of the total revenue. Commissions on debt facilitation, collection solutions and data collection were other revenue drivers for Yubi.
Yubi’s expenses and losses
While Yubi’s revenue grew impressively, its expenses also rose significantly, leading to a deterioration in its bottom line. Yubi’s total expenditure increased by 314% to Rs 895 crore in FY23 from Rs 216 crore in FY22. Employee benefits accounted for 48% of the overall expenses, as the company spent Rs 432 crore on salaries, incentives and ESOPs in FY23, up from Rs 92 crore in FY22.
Yubi’s business support services, information technology, traveling, legal/professional, and marketing costs also contributed to its high operational expenses. As a result, Yubi’s losses increased by 745% to Rs 482 crore in FY23 from Rs 57 crore in FY22. Its ROCE and EBITDA margin worsened -30% and -105%, respectively. On a unit level, the Chennai-based company spent Rs 2.73 to earn a rupee of operating revenue during FY23.
Yubi’s valuation and future plans
Despite its mounting losses, Yubi has been valued at around $1.5 billion after a secondary transaction in July 2023, in which Vivriti Capital, the parent company of Yubi, sold some part of its stake to existing investors. Vivriti Capital, which was launched by Yubi’s co-founders Gaurav Kumar and Vineet Sukumar in 2017, now holds less than 50% stake in Yubi.
Yubi is also planning to hive off from its parent entity Vivriti Capital, and the restructuring process for both entities is nearing completion. Yubi aims to become a full-stack digital lending platform that can cater to the diverse credit needs of businesses across sectors and sizes.
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