Infibeam pushes for AI-driven growth; Q1 profit down 6%

Ahmedabad headquartered Infibeam Avenues on Tuesday said it will foray into artificial intelligence (AI) driven credit and lending space for merchants through strategic banks and NBFC tie-ups. This is a logical extension for the company that operates a payment gateway apart from running ecommerce platform solutions business.  

Last week, TechCircle had reported that Infibeam is out shopping for a Point-of-Sale (PoS) provider, in a move that is expected to help it build a full-stack play for its small and medium business (SMB) focused payments business including offline payment acceptance, payment gateway, credit and neobanking services. 

The shift in strategy was revealed at the company’s first-quarter results announcement. Infibeam reported a 6% decrease in quarterly profit. 

At 10:30 AM Wednesday, about two hours after market open, Infibeam Avenues traded at Rs 41.05 per share, down about 5%. 

The company said its profit from continuing operations rose to Rs 13.4 crore, or Rs 0.10 per share in the first quarter ended June 2021, from Rs 14.2 crore, or $0.11 per share, a year earlier. 

Revenue rose 2.2x to Rs 218.9 crore. 

“With current transaction processing value of Rs 50,000 crore per quarter and millions of full KYC merchants on our platform, the AI driven lending opportunity is the future growth and margin driver for IAL,” managing director Vishal Mehta, said in a statement. 

The lending space is a market opportunity of three digit billion dollars in the country, R Srikanth, president of corporate finance and investor relations told TechCircle. 

The company will invest in AI enabled solutions to upgrade into credit and lending space over the financial year ending March 2022. 

Even as the company’s payment gateway’s business will continue as it stands, Srikanth said, “Merchant lending is a 200 bps growth business as compared to payment gateway which is a 10 basis points growth and ecommerce platform which has seen 7 basis points growth.”  

Post a PoS company acquisition, Infibeam plans to launch its soft PoS offering, in the emergence of the technology as merchants since years of 2020-2021 are seen to move from hardware PoS machines to app-based solutions that are accessible through NFC enabled smartphones. 

Infibeam’s current payment gateway infrastructure processes about $18 billion payments and its software platform enables additional $10 billion worth of transactions of the platform. 

“If this trend continues, where people, institutions and organizations are adopting digitalization at such a faster pace, Infibeam Avenues may soon be processing more than $100 billion transactions,” the company said in the statement. 

Currently, over 3 million merchants are on Infibeam’s platform.