Net loss for the year ended March 31 narrowed to Rs 39 crore, as the company took measures to increase operational efficiencies, chief financial officer Adarsh Dikshith said. Operating revenue rose 6% to Rs 444 crore. In FY23, its operating revenue had expanded 32% from the previous fiscal year.
The Blume Ventures-backed company achieved a profit before interest, taxes, depreciation and amortisation (Ebitda) in the last two quarters of FY24, and projects 100% year-on-year Ebitda growth for FY25. Earlier, ET reported that the company was targeting profitability by the end of FY25.
“For a technology-led company, most of the capital allocation should focus on product development, particularly on new products and initiatives,” Dikshith told ET. “We needed to ensure that our limited capital was allocated more towards building future products, such as our AI offerings, while also strengthening our existing products to maintain customer satisfaction with stability and enhance the features and functionalities of those products.”
The company has raised close to $100 million till date and counts the likes of Steadview Capital and A91 Partners as its investors.
Founded in 2011, Bengaluru-based Exotel provides a software platform that helps enterprises connect with customers across various channels. Two-thirds of its business comes from its customer platform-as-a-service and software offerings, while AI and various digital assets it sells account for the remaining.
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The company was profitable in FY20 and FY21, but slipped into losses due to investments made to fund acquisitions and support growth.It acquired contact-centre software provider Ameyo and chatbot developer Cogno AI in 2021 to enhance its offerings with conversational AI and co-browsing capabilities.
According to Dikshith, the company aimed to combine three different assets to create significant value for customers as, at the time of the acquisitions, market conditions were favourable after Covid with the business growing 50-60% year-on-year. However, integrating these acquisitions and realising synergies took time, he said.
“I think once the Covid wave subsided, the dynamics of engagement changed. The digital engagement that was expected to be the way forward did not fully materialise, leading to a tapering of demand. Economic conditions also shifted, and the availability of capital changed. As a result, we had to ensure that our capital allocation aligned with the new business reality,” he added.
The company remains open to further acquisitions if it identifies opportunities that are value-accretive and available at a favourable price, he said.
Exotel, the winner of the Comeback Kid category at the ET Startup Awards 2022, serves more than 7,000 clients in sectors like banking and financial services, healthcare, consumer tech and ecommerce. About 70-80% of its business comes from India, while it also operates in markets such as the Middle East, Indonesia and Africa.
“We have already made investments in Saudi Arabia and the UAE, which are both very large markets. These markets are now catching up in terms of adopting AI and digital engagement channels, and their economies are also growing well. These are natural adjacent markets for us because our products are ready, and our strong base of referenceable clients in domestic markets is significant,” Dikshith said.
The operations that he said are more efficient now and growth in revenue are expected to contribute to profitability in FY25. “Our sales organisation is now strong and well-structured. Our GTM (go-to-market) motions are much clearer, and our sales execution is significantly better than it used to be,” he said.
