Amazon India market revenue up 32%; ED unlocks WazirX bank accounts

We reported on September 1, citing a Bernstein report, that despite investing more than $6.5 billion in the country over the past nine years, Amazon’s track record in India was “decidedly mixed.” Three business units have now released their FY22 financials, and while the market has seen revenue rise and losses shrink, logistics and payment units have reported rising revenue and losses.

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Also in this letter:
■ WazirX says ED unblocked its bank accounts after investigation
Sachin Bansal’s Navi gets nod from Sebi for Rs 3,350 crore IPO
■ Sebi asks PEs and VCs for details on startup valuations


Amazon India Market revenue up 32%, losses down 23%

AMAZON PROFITS INDIA

Three key units of Amazon India – Marketplace, Logistics and Payments – released their FY22 financials with increased revenue. Amazon’s market unit cut losses while two other companies saw their losses increase, according to regulatory filings from business intelligence unit Tofler.

By the numbers: Amazon Seller Services, which runs the Amazon India marketplace, reported a 32% increase 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. year.

The e-commerce market also managed to reduce net losses by nearly 23% to Rs 3,649 crore in FY22 from Rs 4,748 crore in FY21. amounted to Rs 21,462 crore in FY22 from Rs 16,200 crore a year ago.

Amazon Seller Services spent Rs 6,751.2 crore on order delivery, up from Rs 6,332 crore in FY21. It earned Rs 4,171.4 crore from advertising services, down from 2 Rs 554.2 crore a year ago.

Amazon Transportation, the local shipping services arm of the US e-commerce giant, reported total revenue of Rs 4,581 crore in FY22, a jump of 12.6% from the period of the previous year. Amazon Transportation had reported total revenue of Rs 4,068 crore in FY21.

Net losses in the shipping services arm also increased by more than 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% increase in revenue to Rs 2,052 crore in FY22.

Total losses in the fintech arm of the e-commerce major also rose to Rs 1,740.8 crore in FY22 from Rs 1,516 crore a year ago. This unit manages the Amazon Pay wallet and operates its Unified Payment Interface (UPI) offerings in addition to other payment services.

Mixed results : Amazon’s results come after a report by research firm Bernstein said Amazon India’s business performance was “decidedly mixed” despite the major US e-commerce company investing more than $6,000,000. $5 billion in the country over the past nine years.

The biggest challenge for Amazon has been regulatory headwinds, as many of India’s new e-commerce rules favor domestic companies, according to the report.

Amazon cuts new seller fees in half: Meanwhile, Amazon said on Monday that new sellers who sign up on its platform between August 28 and October 26 and get started within 90 days of signing up will be eligible for a 50% fee waiver. sales in all categories.

He also announced on Monday that his sale will go live from September 23.


WazirX says ED unblocked their bank accounts after investigation

Nischal Shetty, Founder and CEO, Wazir X

Nischal Shetty, Founder and CEO, WazirX

The Enforcement Directorate (ED) has lifted its freeze on WazirX bank accounts, the crypto exchange announced in a blog post on Monday.

Catch up fast: In August, the federal agency said it had investigated one of the directors of Zanmai Lab Pvt Ltd, which operates WazirX, and issued an order freezing his bank assets totaling Rs 64.67 crore.

The action was part of the ED’s survey of 16 fintech companies and instant loan apps. The agency is investigating at least 10 crypto exchanges for allegedly laundering over Rs 1,000 crore identified as proceeds of crime from firms charged in the instant loan apps case, as we reported on August 11. Most of them have a connection with China.


Statement: “Thanks to WazirX’s active cooperation and active Anti-Money Laundering (AML) checks that led to the blocking of suspicious accounts, ED has unblocked WazirX’s bank accounts. WazirX is now able to continue its operations banking as usual,” WazirX wrote in the blog post.

ED claim: In its August memo, the ED alleged that the exchange had “actively” assisted approximately 16 fintech companies under investigation on money laundering charges to divert their proceeds of crime using the cryptography.

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 conducts know-your-customer and anti-money laundering checks, although it has no legal obligation.

Case of instant loan application: Thousands of instant loan application companies are under the scrutiny of polling agencies including the ED, Department of Income Tax, Department of Corporate Affairs (MCA) and police in various states .

The MCA investigation found that most of these China-related entities employ a similar strategy: local entities are incorporated by chartered accountants by filing fabricated documents and registering them when the companies do not actually exist.

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Sachin Bansal’s Navi gets nod from Sebi for Rs 3,350 crore IPO

sachin bansal

Navi Technologies, led by Sachin Bansal, 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 new share issue.

Driving the news: According to Sebi’s website, a letter of observation was sent to Navi on September 5.

Details: The company was considering a pre-IPO placement of up to Rs 670 crore, according to its draft documents.

It is intended to use proceeds from the IPO for investment in 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 earlier founded e-commerce major Flipkart, launched Navi in ​​2018 and has invested around Rs 4,000 crore in the entity to date. It does not dilute its stake in the IPO.


Closed deals ETtech

Yulu financing of the electric mobility startup

■ Electric mobility startup Yulu announced on Monday that it has raised $82 million (Rs 653 crore) in funding led by US-based Magna International Inc., with participation from existing investors such as Bajaj Auto Limited. The startup will use the funds to expand its mobility and battery swap business.

■ Peer Robotics, a mobile robotics solutions startup, said it 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 said on Monday it had acquired health food start-up MyFitness for an undisclosed sum, with the aim of building it into a Rs 1,000 crore brand over the next three to four years. The acquisition will help Mensa Brands launch new categories, scale D2C, invest in brand building and expand into global markets.


Sebi asks PEs and VCs for details on startup ratings

SEBI

The Securities and Exchange Board of India is looking closely at how private equity firms (PEs) and venture capital funds (VCFs) value the startups and unicorns they fund.

Usually, a substantiated valuation paints a positive picture of a fund’s portfolio to investors, paving the way for the fund manager to attract more money from investors in the next fundraising round.

What caused this? Following investor complaints and recent reports of opaque accounting at a few unicorns, the capital markets regulator asked a slew of funds in a Sept. 6 statement to disclose their valuation practices.

Sebi also asked them to share details such as the valuator’s qualifications, whether the hired valuator is an associate of the fund or its manager or sponsor, and whether there has been a significant change in the valuation methodology. over 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.