Perfios targets diverse sectors, geographies to double revenue

To diversify its client base across sectors, Perfios has engaged with new-age startups and developed products and solutions thatserve multiple sectors and geographies.

“Our new set of products is to solve problems in the HR space,” Perfios’ chief executive officer Sabyasachi Goswami told Mint in an interview. “We have launched one product, particularly for background verification. The first few clients have been on the financial services side, the next set of clients would be on the commerce side, where conversations are happening.”

In a recent report, investors at venture capital firm Bessemer Venture Partners, which has invested in Perfios, highlighted the increasing adoption of cloud-based SaaS platforms by banks and non-bank lenders for various use cases, including fraud detection, wealth management, customer engagement, and KYC, among others.

The report added that as pressure from new players, accelerated adoption of digital lending, and widespread cloud usage intensify, there will be a greater opportunity for disruption.

Perfios competes with startups like Signzy and IDfy and claims to be the largest player in the space and the only company that enables end-to-end customer lifecycles for financial institutions.

Earlier this year, the company became a unicorn or a startup with a billion-dollar valuation after it raised $80 million from Teachers’ Venture Growth (TVG), the late-stage venture and growth investment arm of Ontario Teachers’ Pension Plan.

Prior to this, it raised $229 million from Kedaara Capital in a combination of primary and secondary transactions in September. Some of its other existing investors include Warburg Pincus and Bessemer Venture Partners. Perfios raised a total equity funding of about $464 million so far, according to data provided by Tracxn. 

Expanding horizons

Through these fundraises, Perfios plans to foray into newer geographies such as the US and Europe while doubling down in existing markets, including West Asia, Africa and Southeast Asia.

However, the company is taking a more cautious approach as it forays into bigger markets. “In the US, it’s an expensive expansion strategy. You can go in, but if you cannot prove the product, the exit is very expensive. For many companies, that has happened,” Goswami said.

With a presence in over 18 countries across these regions, Perfios receives about 10% of its revenues from international geographies, while the remaining comes from India. However, this figure is expected to increase to 25% over the next two-three years, Goswami said. 

He added that every geographical market is at a different stage of evolution and there is still a lot of awareness that needs to be created in some segments.

With products such as onboarding and underwriting solutions which are its key revenue generators, Perfios’ operating income grew nearly three times to ₹407 crore in FY23. It posted a first-time profit of ₹7.8 crore during the year against a loss of ₹16.8 crore against a year ago. 

The company has seen over nine times increase in growth over the last six years with much of the gains driven by strong performance in its India business, Goswami said.

“From a public infrastructure perspective, India has invested enough into digital stack that is needed for companies like us to ride on that wave,” he said, adding that this has driven the transformation in the last five-seven years. 

With these investments, Perfios has been able to build products to further take the financial agenda forward and make it available across places where people were initially not ready to adopt, Goswami said.

Bessemer’s report estimated that Indian SaaS centaurs and unicorns will bring in between $20 and $25 billion in revenues by 2030. The VC firm added that Indian SaaS businesses have a competitive advantage owing to their ability to build products faster in their lifecycle and scale with lesser capital as opposed to those in other countries.

While Perfios continues to focus on growth and deliver sustained profits, it is also evaluating international acquistions to expand footprint. “We are always open to acquisitions,” Goswami said. While conversations are ongoing, he did not disclose further details. The company will fund these acquisitions through the funds it raised from Kedaara and TVG.

In 2022, the company acquired banking and financial intelligence solution provider Karza Technologies for about ₹600 crore, and later acqui-hired Chennai-based open finance platform Fego.ai the following year.

Meanwhile, the company is also focusing on certain parameters such as financial discipline and governance before it is ready to list on the public markets, Goswami said without disclosing the size or timeline for an IPO. 

Earlier this year, The Economic Times reported that the company is considering a $500 million IPO at a valuation of about $2 billion.

Founded in 2008 by V.R. Govindarajan and Debasish Chakraborty, Perfios offers financial and data analysis software and tools, besides lending solutions for small and medium businesses.