Dear shareholders,
It gives me great pleasure to connect with all of you to present the
performance for the financial year 20-21 and the outlook for the future. I am excited to
share with you all the work we have been doing to lay the foundation for the coming years.
The financial year 20-21 has been a transformative foundation year for the company as we
start our new journey towards building digital platforms and solutions in new growth
segments. Overall, during the year we achieved a consolidated revenue of rs. 712 cr which
represented a 74.9% yoy growth compared to financial year 19-20, which closed at a
consolidated revenue of rs. 407 cr. We also reported positive growth in earnings at both
ebitda and pat level with consolidated ebitda (before other income and exceptional items)
at rs. 13 cr and consolidated pat at approx. Rs. 5 cr for the financial year 20-21
compared to a consolidated ebitda of rs. 7 cr and consolidated losses of rs. 55 cr in the
financial year 19-20. So it was heartening to see the company back in profits at a
consolidated level. The main driver for our growth has been our digital financial
technologies business, housed within spice money, a subsidiary of digispice. Let me first
talk about this business.
1) digital financial technologies services:
at spice money, as i explained in my previous report to you, our
mission is to build a digital services platform for bharat, or consumers in rural india
that will allow them to enjoy the efficiency, access and convenience of the digital
revolution in location and formats they feel comfortable with. As a start, we have
enrolled merchants and entrepreneurs in semi-urban and rural india on to our platform to
serve as the human interface for the consumers in rural india and provide them access to
the same services as are available to the savvy urban consumers.
the entrepreneurs are attracted to the earning potential we offer as we
share with them a part of the transaction fee we are paid by businesses looking to reach
out to service their customers in rural/semi-urban areas using the digital channels. The
success of this model can be gauged by the following metrics: (a) as of the close of the
last financial year, we on-boarded close to 576,000 entrepreneurs (spice money adhikaris)
on our platform which represented a 2.4x growth yoy.
(b) our merchants are present in all the districts and almost every pin
code across the country.
(c) this contributed to our overall gtv (gross transaction value)
reaching close to rs. 82,000 cr for the last financial year which represented a
similar growth of close to 2.3x compared to the previous financial year which closed at an
overall gtv of rs. 36,000 cr. This growth in transactions and gtv was mainly on
account of growth in cash withdrawal transactions, wherein our spice money adhikaris used
our platform to allow customers in rural/ semi-urban areas withdraw cash from their dbt
accounts. This was partly driven by the increase in subsidies disbursed by the governments
both at a central and state levels. The aadhar-enabled payment system (aeps) run by npci
forms the backbone on which we run our cash withdrawal services, and the bank consumer is
able to access his account information and his cash by authenticating himself using the
aadhar biometric (so no need to carry any card or remember any pin or password). We
provisioned about 13.7% of all the aeps transactions value in the financial year 20-21 in
the country, as compared to 11.8% in the financial year 19-20.
it is gratifying to be able to contribute as a platform towards
connecting millions of customers in small town and rural india to their bank accounts when
they need it the most. We will continue to build out our adhikari network density to reach
even closer to the doorstep of our target consumer.
going forward, our focus will remain on expanding our market share
within the aeps industry segment by both scaling up our adhikari network as well as making
our platform the most preferred platform of choice for our adhikaris.
we launched a cash management product for enterprises in the last
financial year 20-21. This allows enterprises operating in rural areas to reduce their
cost of collections, and get the cash faster in their accounts thus reducing working
capital need. Microfinance companies and nbfcs have been the early adopters as their
agents and consumers deposit cash into company bank accounts at our adhikari points. We
have seen this product scale in terms of gtv to around rs. 419 cr in 20-21. We will
continue to focus on this product and work towards closer integration of our platform with
our enterprise customers.
we are also working to make utility payments (like electricity, water,
gas, telecom, insurance etc.) Very convenient for semi-urban and rural households. Our
utility payment transactions value grew from rs. 394 cr in financial year 19-20 to rs. 893
cr in financial year 20-21. As a bbpsou (bharat bill payment services operating unit), we
expect more billers to join our platform in the coming year resulting in more customers
being able to use our platform to pay more of their bills closer to where they live.
the next product vertical that we are focused on is the travel product.
This vertical got negatively impacted last year due to the intermittent lockdowns across
the country. We used this time to re-invent our approach to this product and in q2 of this
financial year 21-22, we launched travel union, a new b2b traveltech platform targeted
towards travel agents in small town and rural india in partnership with sonu sood. Our
hypothesis here is that there are many travel agents in semi-urban and rural india who do
not have access to products and services akin to travel agents in urban india and,
therefore, the travel union digital platform has been designed keeping their requirements
in mind. I will keep you all updated on the progress with reference to adoption of this
platform in our regular quarterly investor updates.
going forward, we see our spice money platform working on multiple use
cases targeted towards the needs of the rural consumers as we build towards our mission of
providing them with the same service access as available to users in urban india. We are
constantly running pilots in partnership with strategic players in the tech and non-tech
eco-system who would be interested in serving our target markets. I hope that some of
these pilots will convert into scalable and profitable products, and i will continue to
share with you updates on the progress of these initiatives.
our main proposition to our partners (businesses) is both around rural
customer access, convenience, education and around economic viability, i.e. Enabling
product and service providers to access the large semi-urban and rural market in an
economically viable manner. I am confident that going forward we will be able to become
the rural digital platform of choice for our partners and customers.
2) digital technology services:
this refers to our legacy product segment serving the telco industry
that has been showing de-growth in recent years. We have been working to turn this
business around and have decided to focus on building and growing digital platforms and
solutions within the expanded customer base of telco, bfsi and technology companies.
We launched korero platforms in q1 of this financial year (21-22), our
new c-paas (communications platform as a service) offering for customers within our target
markets. We see this as a promising opportunity in emerging markets as enterprises
automate their customer engagement journeys. A trend we are observing for not only the
large but also the micro enterprises. Through korero platforms, we expect to extend the
benefits of such new industry platforms to small and medium sized enterprises. In the
financial year 20-21, we onboarded 30 enterprises for our communications enterprise
business and our enterprise revenues grew from rs. 65 cr in financial year 19-20 to rs. 87
cr in financial year 20-21. Going forward, our focus will be to both increase number of
enterprises on to our c-paas korero platform as well as drive higher customer engagement
(in terms of both number of transactions per customer as well as number of communication
channels used per customer).
For the telco segment, as i indicated in my last annual report, we are
focusing on building digital products for leading telcos in select markets. In the
financial year 20-21, while our overall telco segment revenues yoy dropped to rs. 47 cr
from rs. 91 cr in financial year 19-20, our revenues from the digital telco products grew
from rs. 3 cr in financial year 19-20 to rs. 6 cr in financial year 20-21. Going forward,
our focus will be to both drive the adoption of each of the digital products deployed in
every telco customer as well as drive number of telco customers.
Overall summary:
To summarise, we as digispice technologies remain committed to building
relevant digital platforms and solutions for the emerging digital consumer, a journey we
started on about 3 years back. We see huge opportunities in our chosen space, as well as
challenges that require us to remain agile in terms of defining and executing our
strategic and operational actions in response to changes in the market landscape and
technologies. We will thus continue to run many experiments around product development and
business models as we go after these emerging opportunities. At the heart of everything we
do will be 2 things: a) whether we are solving a real problem for our target customer
while building something scalable and b) can we build an economically viable business.
Given that "digital" is the new normal, i do hope that we will be able to create
a valuable business that is relevant, impactful and scalable. I thank all the members of
our family at digispice technologies group, our employees and partners for their
unstinting commitment, hard work and support over the last one year. I look forward to an
even exciting year ahead with all of you as we explore ever new territories and build
first of its kind products leveraging technology and the evolving digital ecosystem. I
would like to also take this opportunity to thank all our shareholders for their belief
and trust in the management and the company vision. We will work hard every day to live up
to this trust that you have imposed on us and hope to build a company for you that will
grow on its core values of innovation, integrity and intensity.
Wishing you and all your families a very happy new year ahead. Please
stay safe.