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Tracxn Technologies (the Issuer) was incorporated in Bengaluru in the year 2012. The Issuer has an asset-light business model and operates as a Software as a Service (SaaS)-based platform. It offers private company data for deal sourcing, identifying M& targets, deal diligence, analysis, and tracking emerging themes across industries and markets, among other uses, through the subscription-based platform to its customers.
Tracxn launched its platform in FY15 with a particular focus on the global emerging technology sector, providing users with detailed profiles of companies including detailed information on funding rounds and acquisition-related information, taxonomy and market maps, global competitor benchmarking, financial information, valuation and capitalization tables, employee count, investor profiles, competitor mapping, information about founders, key team and board member, company and sector-specific reports and news events.
The company has the largest coverage of private companies in emerging technology sectors including IoT, artificial intelligence, virtual reality, robotics, blockchain, and electric vehicles. The Issuer has scanned over 662 million web domains and profiled over 1.84 million entities across 2,003 Feeds categorized across industries, sectors, sub-sectors, geographies, affiliations, and networks globally, as of June 30, 2022. The platform has 3271 Users across 1139 Customer Accounts in over 58 countries, as of June 30, 2022. Its customers include a number of Fortune 500 companies and/or their affiliates such as Unilever Industries Private Limited.
The Issuer has a geographically diversified Customer Account base which includes (i) private market investors and investment banks viz., venture capital and private equity investors, investment banks, (ii) corporates across industries, and (iii) others including government agencies, universities, accelerators, and incubators.
The customer Accounts have increased at a CAGR of 30.42%, from 642 Customer Accounts, as of March 31, 2020, to 1,092 Customer Accounts, as of March 31, 2022, and 1,139 Customer Accounts as of June 30, 2022. As of June 30, 2022, 267 active Customer Accounts have been associated with the Issuer for over three years (with a maximum gap of three months between subscriptions).
The company is led by Promoters, Neha Singh and Abhishek Goyal. Each of them has significant experience in the venture capital and technology industry and has in the past been associated with venture capital firms such as Accel Partners and Sequoia Capital.
The company’s operations have been supported by investments from angel investors such as Ratan Tata, the NRJN Family Trust, Neeraj Arora, Sachin Bansal, Binny Bansal, Amit Ranjan, Girish Mathrubootham, Anand Rajaraman, Amit Singhal, and Ashish Gupta. It has also received investments from Elevation Capital, Accel Partners, Sequoia Capital, Prime Venture Partners, and KB Investments.
The Issuer posted revenues from the operation of Rs 18.4 crore for Q1FY23 and this was the first quarter in which the company has turned profitable, it posted profits of Rs 0.92 crore with 1% EBITDA margin. Total Revenues from operation increased by 17% to Rs 65.16 crore in FY22 from Rs 55.74 crore in FY21. However, Tracxn posted losses of (4.85) crore in FY22 and Rs (4.16) crore in FY21.
70% of the revenues are derived from the international markets and 30% are domestic revenues.
The company has negligible debt.
| Particulars | Q1FY2023 | FY2022 | FY2021 | FY2020 |
| Total Revenue | 19.08 | 65.16 | 55.74 | 6.31 |
| Revenue from operations | 18.4 | 63.45 | 43.78 | 37.33 |
| PAT | 0.92 | -4.85 | -4.16 | -54.83 |
| EBITDA | 0.18 | -6.39 | -17.06 | -23.26 |
| Total Assets | 56.78 | 54.01 | 48.46 | 52.38 |
| Net cash generated from operations | 1.57 | 0.56 | -6.06 | -15.39 |
| EBITDA Margin | 0.98% | -10.07% | -38.97% | -62.31% |
The Issuer has no listed peers as per the RHP. However, Crunchbase, Snowflake, and Pitch Funding are some of the unlisted peers. The Issuer&rsquo's P/E is 250 times its annualized EPS of 0.32 for Q3FY23. The IPO seems to be exorbitantly priced.
Tracxn Technologies IPO opens on 10th Oct and closes on 12th Oct at a price band of Rs 75-80 per share. The issue is entirely an offer for sale. The issue is expected to list on 20th Oct.
Tracxn is an information service provider which tracks emerging technology companies and various start-ups across sectors on certain financial and operational parameters. This information helps industry stakeholders like large corporates, incubators or funding companies to understand the ongoing trend and make investment decisions.
Though Tracxn has a wide presence and operates on an asset-light business model, however, the Issuer has a weak financial profile and the IPO is highly-priced. Further, the promoter's share would come down to 35% after the IPO. Hence investors might avoid this IPO.
Review By CA Priyanka Choudhary on 28th Sep 2022
About CA Priyanka Choudhary
Priyanka Choudhary Jain is a Chartered Accountant and an experienced credit analyst. She has worked with CRISIL as Senior Credit Analyst on ratings assignments including business and financial analysis in Corporates as well as the Public Finance Sector.
Email: [email protected]
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.
