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Also in this letter:
■ WazirX says ED has unfrozen its bank accounts after probe
■ Sachin Bansal’s Navi gets Sebi nod for Rs 3,350-crore IPO
■ Sebi asks PEs, VCs for details of startup valuations
Amazon India marketplace revenue up 32%, losses down 23%
Three key units of Amazon India – the marketplace, logistics and payments — reported their FY22 financials with increases in revenue. Amazon’s marketplace unit cut its losses while other two businesses saw an increase in losses, regulatory filings sourced from business intelligence unit Tofler showed.
By the numbers: Amazon Seller Services, which runs the Amazon India marketplace, reported a 32% jump in overall revenue to Rs 21,633 crore on a standalone basis for the financial year 2021-2022 (FY22), from Rs 16,378 crore a year ago.
The ecommerce marketplace also managed to cut net losses by almost 23% to Rs 3,649 crore in FY22 from Rs 4,748 crore in FY21. Revenue from operations for the marketplace stood at Rs 21,462 crore in FY22 from Rs 16,200 crore in the year-ago period.
Amazon Seller Services spent Rs 6,751.2 crore on delivering orders, compared to Rs 6,332 crore in FY21. It earned Rs 4,171.4 crore from advertising services compared to Rs 2,554.2 crore a year ago.
Amazon Transportation, the local shipping services arm of the US ecommerce giant, reported total revenues of Rs 4,581 crore in FY22, a 12.6% jump from the year-ago period. Amazon Transportation had reported total revenues of Rs 4,068 crore in FY21.
Net losses for the shipping services arm also grew by over 38% to Rs 95 crore in FY22 from Rs 68.7 crore a year ago.
Amazon’s payments and financial services distribution arm, Amazon Pay India, reported a 16% jump in revenue to Rs 2,052 crore in FY22.
Total losses for ecommerce major’s fintech arm also grew to Rs 1,740.8 crore in FY22 from Rs 1,516 crore a year ago. This unit runs Amazon Pay wallet and operates its Unified Payments Interface (UPI) offerings besides other payment services.
Mixed results: Amazon’s results come after a report from research firm Bernstein said Amazon India’s business report card has been ‘decidedly mixed’ in spite of the US ecommerce major investing over $6.5 billion in the country over the past nine years.
The biggest challenge for Amazon has been regulatory headwinds, since many of India’s new ecommerce rules favour domestic companies, the report said.
Amazon halves new seller fee: Meanwhile, Amazon said on Monday that new sellers who register on its platform between August 28 and October 26 and launch within 90 days of registering will be eligible for a 50% waiver on the selling fee across all categories.
It also announced on Monday that its sale would go live from September 23.
WazirX says ED has unfrozen its bank accounts after probe
Nischal Shetty, founder and CEO, WazirX
The Directorate of Enforcement (ED) has lifted its freeze on the bank accounts of WazirX, the crypto exchange said in a blog post on Monday.
Catch up quick: In August, the federal agency said it had conducted searches on one of the directors of Zanmai Lab Pvt Ltd, which operates WazirX, and issued an order to freeze its bank assets totalling Rs 64.67 crore.
The action was part of the ED’s investigation of 16 fintech companies and instant loan apps. The agency is probing at least 10 crypto exchanges for allegedly laundering more than Rs 1,000 crore identified as proceeds of crime from firms accused in the instant loan apps case, as we reported on August 11. Most of them have a China link.
Statement: “Due to the active cooperation extended by WazirX and active anti-money laundering (AML) checks that led to the blocking of suspicious accounts, ED has unfrozen the bank accounts of WazirX. WazirX is now in a position to continue its banking operations as usual,” WazirX wrote in the blog post.
ED allegation: In its note in August, the ED alleged that the exchange had “actively” assisted around 16 fintech companies under investigation on charges of money laundering to divert their proceeds of crime using crypto.
But in its blog post, WazirX said it had no association with any of the accused fintech and instant loan app entities. The company said it was carrying out know-your-customer and anti-money laundering checks despite having no legal obligation.
Instant loan app case: Thousands of instant loan application companies are under the scanner of probe agencies, including the ED, Income-Tax Department, Ministry of Corporate Affairs (MCA), and the police in various states.
The MCA’s probe found that most of these Chinese-linked entities employ a similar strategy: the local entities are incorporated by chartered accountants by filing fabricated documents and registering them when the companies don’t actually exist.
Tweet of the day
Sachin Bansal’s Navi gets Sebi nod for Rs 3,350-crore IPO
Sachin Bansal-led Navi Technologies has received the green light from the Securities and Exchange Board of India (Sebi) for its initial public offering (IPO). Navi had filed its draft prospectus with Sebi for a Rs 3,350-crore IPO through a fresh issuance of shares.
Driving the news: According to Sebi’s website, an observation letter was issued to Navi on September 5.
Details: The company was considering a pre-IPO placement of up to Rs 670 crore, according to its draft papers.
It is expected to use the IPO proceeds to invest across its subsidiaries – Navi Finserv Pvt Ltd (NFPL) and Navi General Insurance Ltd (NGIL) – and for general corporate purposes. Navi said it would invest Rs 2,370 crore in Navi Finserv and Rs 150 crore in its general insurance business.
Bansal, who founded ecommerce major Flipkart earlier, started Navi in 2018 and has invested around Rs 4,000 crore into the entity to date. He is not diluting his stake in the IPO.
ETtech Done Deals
■ Electric mobility startup Yulu said on Monday it has raised $82 million (Rs 653 crore) in funding led by US-based Magna International Inc., with existing investors such as Bajaj Auto Limited also participating. The startup will use the funds to scale its mobility & battery-swapping businesses.
■ Peer Robotics, a mobile robotics solution startup, said it has raised $2.3 million in seed funding led by Kalaari Capital, with participation from existing investors Axilor Ventures, Connecticut Innovations, and Innopact VC. The startup works with humans in real-time, mirroring workflows in manufacturing operations on repetitive tasks to save time, increase efficiency, and reduce injuries.
■ Direct-to-consumer (D2C) company Mensa Brands on Monday said it has acquired healthfood startup MyFitness for an undisclosed sum, with the aim of making it a Rs 1,000 crore brand in the next three to four years. The acquisition will help Mensa Brands launch new categories, scale D2C, invest in brand-building, and expand to global markets.
Sebi asks PEs, VCs for details of startup valuations
The Securities and Exchange Board of India is looking closely at how private equity houses (PE) and venture capital funds (VCF) value the startups and unicorns they bankroll.
Usually, a propped-up valuation gives a rosy picture of the portfolio to a fund’s investors, paving the way for the fund manager to attract more money from investors when it goes for the next round of fundraising.
What prompted this? Following complaints from investors and recent reports of opaque accounting at a few unicorns, the capital markets regulator asked a large number of funds in a communique on September 6 to disclose their valuation practices.
Sebi also asked them to share details such as the qualifications of the valuer, whether the valuer hired is an associate of the fund or its manager or sponsor, and if there has been a significant change in the valuation methodology in the past three years, among other things.
Today’s ETtech Top 5 newsletter was curated by Zaheer Merchant in Mumbai and Gaurab Dasgupta in New Delhi. Graphics and illustrations by Rahul Awasthi.
