The startup plans to go for an IPO only after generating ‘consecutive quarters’ of profitability
Dasari said that sometimes scale and profitability are not as inversely correlated as they might seem
The cofounder said that nearly 89% of WayCool’s revenue was CM2 positive
In a development that appears to be in the making for a few years now, WayCool’s cofounder and head of growth Sanjay Dasari has now said that the agritech startup plans to go for a public listing by 2025.
The startup plans to go for an initial public listing (IPO) only after generating ‘consecutive quarters’ of profitability.
“WayCool has been planning for a 2025 IPO for the past few years. For us, the understanding has always been that we will IPO with consecutive quarters of profitability and as a company we’ve been moving towards that trend quite aggressively for the past few years…,” Dasari said while speaking at Inc42’s The Makers Summit 2023.
On achieving this profitability aspect for IPO, Dasari said that it was important to note that sometimes scale and profitability are not as inversely correlated as they might seem. Citing WayCool’s example, Dasari said that scale was the path to profitability, especially in the agritech industry.
In a bold statement, he said that WayCool’s nearly 89% of revenues were contribution margin 2 (CM2) positive and as a result it was important to further shore up its businesses to achieve profitability at scale.
CM2 indicates the aggregate amount of revenue left after variable costs to cover fixed expenses are accounted for and is a metric for future profitability.
“… you need to scale those businesses even further so they can continue to generate more revenue… for it to cover corporate costs and will eventually lead to the entire company turning profitable,” Dasari added.
Chiming in, BigHaat’s cofounder and director Sachin Nandwana said that the agritech startup was close to being EBITDA positive and plans to shore up its strategy to turn PAT positive sooner.
Nandwana said that he believed that farmers would be willing to pay if they get the desired benefits. Sharing his business mantra, he added that he was more focussed on generating more revenue per resource, as it would increase the startup‘s top line.
Noting that BigHaat steered clear of the burn-model, he said that the agritech startup was not in the burn game and was in the business of value creation.
Prior to this, Nandwana also said that technology could help fill the chasm in the agriculture sector and introduce new changes across supply and value chains.