B2B marketplace Indiamart reported a loss of R40 crore in the year to March 2016 on revenues of R300 crore, Dinesh Agarwal, CEO of Indiamart told FE.
Revenues rose a smart 40% over FY15 and the company is targetting another 40% jump in FY17. Agarwal added the losses would come down in FY17.
The Noida-based company is a B2B marketplace for small, medium and large-sized enterprises that connects buyers to suppliers based on the requirements. The company has raised funds across three rounds from Brand Capital, Intel Capital, Amadeus Capital Partners, Accion Frontier Inclusion Fund and WestBridge Capital.
The customer acquisition cost for Indiamart is R15,000, which is a one-time fee. the marketplace is adding 20,000 paying suppliers and 100,000 free suppliers every month. Indiamart’s revenue model works on lead generation and it earns no commission on conversion. Irrespective of the conversion that takes place on the platform, Indiamart charges a subscription or a pre-paid fee to the supplier for every lead.
In the pre-paid model, the supplier can be listed on the platform for free but he will have to purchase the lead from Indiamart. “A lead cost typically R449 but through this package the supplier can buy a lead for as low as R200,” Sumit Bedi, vice president – marketing, Indiamart explained.
Under the subscription package, Indiamart will charge a subscription fee and give the supplier listing on the site, cataloging services and better lead and content management.The subscription starts from R2,500 and goes to R2.5 lakh, per month, according to Agarwal.
Indiamart has 110,000 paid suppliers on the platform. About 25,000 of them have 3-year or multi-year subscription; 30,000 have an annual subscription and 55,000 have a monthly subscription. In 2014, Indiamart launched its subsidiary Tolexo, an online marketplace for industrial goods. According to Agarwal, the company clocks gross merchandise value of $1 billion every month and earns a commission in the range of 12-18%.
In FY15, Indiamart had invested $10 million in Tolexo and committed another $15 million each for FY16 and FY17. Collectively, Agarwal is targetting R2,000 crore in revenue by 2020 from three businesses – Indiamart, Tolexo and ProcMart