IDfy’s Operating Revenue Exceeds Rs 50 Cr in FY22, Losses Soar 2.5X
The covid outbreak has given identity verification platform business wings as work from home (WFH) culture has become the new normal and tech companies have begun to onboard new employees online . Several space startups such as Digio, Hyperverge, and Karza have seen their business increase as a result.
One such startup is IDfy, backed by Blume Venture, which managed to increase its revenue by nearly 50% to Rs 56.48 crore in FY22 from Rs 37.83 crore in FY22. prior financial year (FY21), according to the company’s annual financial statements with the Registrar of Companies. (Rock). For IDfy, the outbreak not only forced a model change, it was also the year it launched two keys products – Video KYC and Zero Touch Onboarding. It took HDFC Bank’s Video KYC Live over the year, in addition to onboarding 2 delivery managers every minute for Amazon to meet the growing demand for these resources.
Banking, e-commerce, capital market, insurance, gaming, and fintech are all segments it serves. According fintrackrAccording to analysis by , professional fees collected from these services are the only source of income for the Mumbai-based startup.
Launched in 2011, IDfy has had its share of pivots, including going from a B2C company to a B2B company. Now, it collects information either through its platform or from its customers’ websites or apps using the platform’s APIs. Its founder and CEO Ashok Hariharan recently said that its proprietary AI stack can detect deep 2D, 3D and photo counterfeits.
On the expense side, benefits expenses are the largest cost center for the business, contributing 47% of the overall cost. This cost increased by 72.5% to Rs 36.46 crore in FY22 from Rs 21.14 crore in the previous year (FY21).
Audit expenditure is another vital cost after employee benefit expenditure which remained flat at Rs 11 crore in FY22. With the growth in scale, labor expenditure (outsourced) increased by 70% to Rs 9.72 crore in FY22. The cost of website maintenance also doubled to Rs 6.84 crore in fiscal year 22.
The company spent an additional Rs 3.22 crore on rent, pushing up total spending by 67.4% to Rs 76.9 crore in FY22. The company’s losses soared 2.5 times to Rs 18.72 crore in FY22 from Rs 7.39 crore in FY21.
Due to increased expenses, IDfy’s cash outflow from operations was recorded at Rs 81 crore in FY22. On a unit level, the company spent Rs 1.36 crore to earn a single operating revenue unit. With such high costs and losses, ROCE has also deteriorated to 30.86% over the past fiscal year.
IDfy competes directly with SpringVerify led by Kartik Mandaville, AuthBridge backed by Phi Capital which received $7 million in its Series B in December last year, Digio which raised $4 million led by Thai interbank payments provider PCC and Karza, a risk management startup which was acquired by Perfios for $80 million in february. Besides India, it is present in Southeast Asia and the Middle East.
India’s digital authentication market is expected to reach $2.4 billion by 2024, according to a report by RedCore. Globally, the market size is expected to reach $142 billion by 2028, according to the Fortune Business Insights report.
The nature of the business lends itself to new revenue models, whether it is a per transaction model or recurring revenue. For IDfy and the competition, it will be about using technology as efficiently as possible to deliver at scale around the world, to reward the trust of their investors.