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Your window to the startup world: Inside Info Edge


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A few years ago, Mr. Sanjeev Bikhchandani got five calls from investors saying, “You’ve got the business (99 acres was generating 70-80 Cr of revenue)”. They said, “We’ve got the product right with Why don’t we merge?”

Mr. Bikhchandani replied, If you have got the product, how come we have the business? You merge with the complimentary product, not with the substitute”.

This one line summarizes how a self-made billionaire built an empire, made profitable investments in the start up world & runs a listed VC fund from India.

In this article we look at the evolution of Info Edge from a recruitment website into a breeding ground for technology startups looking to capitalise on “The India opportunity”.

About the Company:

Info Edge is a multi-brand online classifieds company with its principal market in India. Over a period of more than two decades, it has steadily developed a portfolio of brands across different domains that primarily provide online classified services. While the company’s business has evolved around the phenomenal growth of its flagship brand – Naukri, the other brands including 99acres, Jeevansathi and shiksha are fast gaining traction in the market and growing revenues.

The impressive success of Naukri over the years has provided Info Edge with a strong annual Free cash flow that has helped build solid cash reserves. The company has invested this cash into some of the highly successful technology based start-ups like Zomato, Policybazaar, Ustraa, Shopkirana, Printo, Shoekonnect etc. Each of the brands addresses specific customer domains and are in different stages of their growth life cycle.

Your window to the startup world: Inside Info Edge

Brands under direct management – Standalone Entity

Recruitments –

The recruitment services business is built around and comprises the following portals:

  • This is the company’s flagship brand and India’s largest online jobsite with a market share of ~70%.
  • This is a job site that focuses on the Middle-Eastern market.
  • Launched in January 2009, this site focuses on entry-level jobs.
  • Acquired in 2019, IIMjobs is India’s leading recruitment platform for management professionals with 23,000 job postings and 1.8 million job applications every month.

It is a business of the virtuous circle. Maximum traffic resulting in most responses attracting the most clients leading to the most job postings, which in turn propels maximum traffic.

Your window to the startup world: Inside Info Edge

Your window to the startup world: Inside Info EdgeYour window to the startup world: Inside Info Edge

Daily activity on Naukri:

  • 434K Job listings
  • 8240 new resumes added
  • 323K resumes modified
  • 2,348K recruiter email connects
  • 353K resume searches daily

To grow the recruitment portfolio, the company is test marketing two new job sites.

  • Focused on the “Blue collar” jobs.
  • BigShyft: AI based technology hiring platform.

Both are in nascent stages but could provide synergies over the long term.

Naurki contributed 69% of the consolidated revenue and generated a PBT of 481 Cr as of March’ 20.

Your window to the startup world: Inside Info Edge

Real Estate –

99acress is the market leader in real estate classified with a traffic market share of 45%. The online real estate classified addressable market across all media categories ranges between 3,000 Cr to 4,000 Cr annually.

Revenue streams for originate from:

  • New Homes: Project listings, email campaigns and banner advertisements
  • Resale & Rentals: Listings, top position listings and dealer branding.
  • Marketing Campaigns: Campaigns for marketing and remarketing to targeted customers on 99acres and other platforms.
  • Owners monetization: Products for owners who want to sell or lease their properties.

Your window to the startup world: Inside Info Edge

Your window to the startup world: Inside Info Edge

While in terms of number of customers, the broker community is dominant with 21,600 out of a total of 26,600 customers, in terms of billing they contribute 52%, while builders contribute 42%, with much higher revenue per customer compared to brokers.

99acress contributed 18% of the consolidated revenue and generated a loss of (-5.8) Cr as of March’ 20. The losses have been reduced from 106 Cr in 2016 to 5 Cr as of 2020. This year it turned profitable at operating level with an EBITDA of 8.4 Cr as of March 2020.

Your window to the startup world: Inside Info Edge

Matrimonial –

Jeevansathi offers a free platform for listing, searching, expressing interest and accepting others’ expression of interest in the online matrimonial space. Revenues are generated from sharing of contact details and some value added services.

On an average, nearly 12-14 million weddings take place in India every year, of which 80% are arranged marriages. Online matrimonial classified market is estimated to be between 700 Cr to 800 Cr in India & is expected to grow to 1200 Cr by 2023.

Marriage matchmaking is a highly fragmented market in terms of regions within India and communities. Consequently, there are around 1500 matchmaking sites in India. Many of these sites cater to a specific region or community, instead of becoming pan-Indian, cross-community players.

In terms of market share:

  • Bharatmatrimony is the overall leader and has a strong presence in the South India & NRI community from that region.
  • Shaadi is the number two player and has strength in states like Gujarat, Punjab and NRI’s of that region.
  • Jeevansathi has leadership among certain north Indian communities & states.

Your window to the startup world: Inside Info Edge

Jeevansathi contributed 6.5% of the consolidated revenue and generated a loss of (-63) Cr as of March’ 20. Info Edge continues to invest in it to gain market share.

Your window to the startup world: Inside Info Edge

Education –

Shiksha is the company’s offering in the online education classifieds space. It is a platform that helps students research and apply UG and PG programs, by providing information on careers, exams, colleges and courses.

The business generates revenues from:

  • Branding and advertising solutions for colleges and universities (UG, PG, post-PG). It gets advertising revenues from both Indian and foreign institutions.
  • Lead generation: Potential student/applicants details are bought by colleges and their agents. Full counselling services are provided for some international university partners.

Shiksha contributes 4% of the consolidated revenue and generated an EBITDA of 3 Cr as of March 2020.

Your window to the startup world: Inside Info Edge

Investee Companies:

In addition to promoting businesses internally, the company has made investments in emerging brands. These are typically in early stage ventures and their subsequent rounds of funding for growth. Most of these companies are still in the investment stage and are loss-making.

The objective of the investment strategy is to:

  • Financial gain from the success of the investee company
  • Support back-end architecture of existing businesses
  • Synergies in terms of market share, customers & platforms

Undoubtedly the best investment till date for Info Edge. Zomato is one of the largest online restaurant search and discovery platforms with three key businesses.

  • Listing and Reviews: This was launched in 2008 and has a presence in 24 countries. Today, there are over 1.5 million restaurants listed across the world on the Zomato platform.
  • Food Delivery: This was launched in 2015 and primarily operates in India. After the acquisition of Uber Eats by Zomato (for a valuation of $350 Mn), it is now a duopoly market between Zomato (52% market share) & Swiggy (48% market share).
  • Subscription Programs: Launched in 2017, this has an India and international presence, and runs membership privilege program funded by restaurants.
  • Hyperpure: This is a B2B restaurant supply business for ordering all restaurant raw materials online.

Zomato posted revenue of 2604 Cr during FY20 as against 1312.5 Cr during FY19 (a growth of 98.5% YoY). It had an EBITDA loss of 2197 Cr in FY 20 as against 2077.5 Cr in FY19.

Info Edge’s aggregate investments in Zomato is about 152.2 Cr as of March 2020. In 2018, the company had partly monetized its stake by selling 6.66% for $50Mn to Ant Financials. As per the latest management commentary, Zomato is planning for an IPO in 2021.

Your window to the startup world: Inside Info Edge

PolicyBazaar is India’s online price comparison site for insurance. It is a market leader in its category garnering an estimated 95% share of insurance comparison activity and 50% of online Insurance transactions.

The revenue is derived from various services provided to insurance companies and banks like,

  • Transaction support
  • Platform development
  • Marketing activities

The PolicyBazaar Group also operates, which is an online financial services comparison platform and allows its users to apply for loans via its platform.

PolicyBazaar posted a revenue of 310 Cr in FY19 & 158.3 Cr in FY18. It had a loss of 213 Cr in FY19 & 9.4 Cr in FY18. The management of Policybazaar is expecting to reach revenue of 1100 Cr by 2021 & to be profitable during the same period.

Your window to the startup world: Inside Info Edge

Investments in Policybazaar are held by Info Edge directly (7.59%) and indirectly through a JV subsidiary with Temasek (8.26%) via MakeSense Technologies.

The Company through its subsidiaries has invested 575.8 Cr in PolicyBazaar as on March 31, 2020. PolicyBazaar is also planning for an IPO in 2021.

Happily Unmarried (Ustraa)

Happily Unmarried is an e-commerce platform running brand like Ustraa, a leading grooming & personal care brand aimed at the young Indian male.

The company is majorly into, Beard Care, Hair care, Fragrances & Washes. It sells through its own website, online marketplaces and through super markets across the country.

Happily Unmarried posted revenue of 57.3 Cr during FY20 as against 39.6 Cr during FY19 (a growth of 44.6% YoY). It had a loss of (-17.6) Cr in FY 20 as against (-11.7) Cr in FY19.

The company is currently valued at 220 Cr & Info Edge owns 30% of the company. Info Edge’s aggregate investments in Happily Unmarried is about 32.3 Cr as of March 2020.

Other investee Companies:

Your window to the startup world: Inside Info Edge

Info Edge Venture Fund – AIF

The company had recently set up an AIF in sectors other than the four verticals the company operates in (recruitment, real estate, education and matrimony, online classifieds).

Info Edge has proposed 750 Cr for this fund. Out of which 150 Cr has already been disbursed. They are in discussions with potential investors to form a JV & raise 50% of the total corpus.


Sanjeev Bikhchandani & Hitesh Oberoi proved to be good at capital allocation. Just 14% of the cash generated by recruitment has been used to fund other businesses.

Revenues have compounded by 19% in the last 10Y. It is a debt free company with an EBITDA margin of 31.6% and ROE of 23.7%. The company has an exposure of 1081 Cr in Investee companies. This excludes the 314.7 Cr that have been written-off, exited or provisioned for.

Your window to the startup world: Inside Info Edge

Click to enlarge

Your window to the startup world: Inside Info Edge

Source: Info Edge Sep 2020 Presentation

Cash is really the King for Info Edge.

Because of the nature of the business, Info Edge always carries huge cash balances on its books. Even though it dilutes its ROE, it contributes to a large extent of its EBITDA.

Your window to the startup world: Inside Info Edge

So, is it an Operating Company or Holding Company ? Both.

The company recently raised 1875 Cr in Aug 2020 via QIP. Post the recent dilution, promoter holds 40.4% without any pledge.

Your window to the startup world: Inside Info Edge

Info Edge Post Covid

  • Naukri is back to 95 % of its pre-covid levels
  • In 99acres, buyer & owner traffic is back to 90% of pre-covid levels
  • In Jeevansathi and Shiksha, traffic is now higher than the same time last year
  • Zomato had a significant impact on its operations during lockdown. However things have started to normalize. As of now, the food delivery industry has clocked 85% of pre-Covid gross merchandise value (GMV).
  • PolicyBazaar continues to benefit from the growing need for insurance. However Paisa Bazaar has been impacted by moratorium extensions. It has substantially reduced headcount to preserve cash and is exploring opportunities to expand into non-lending categories.

Views & Valuations

Naukri will continue to be the cash cow for Info Edge for the foreseeable future. Even though LinkedIn is trying hard to gain market share from Naukri, it hasn’t made any significant impact yet. 99acress is on the verge of break even & will turn profitable in the next couple of years. Info Edge had guided for more marketing spends in Jeevansathi & that will continue to be a dragger.

Your window to the startup world: Inside Info Edge

Click to enlarge

The company currently trades at 76 times (considering FY19 PAT). Even though this is on a higher side, historically Info Edge had always commanded higher valuations. We also expect immediate triggers in the form of Zomato & PolicyBazaar IPO. Overall it’s a decent & direct bet on India’s e-commerce industry & an opportunity to get a pie of the start-up world. 

NOTE: As a disclosure, some Capitalmind authors & the company may be invested in the mentioned stock in their portfolios. Please do not consider this article as a recommendation, It is for informational purposes only.

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