Unicommerce Esolutions

Largest e-commerce enablement platform

Player in an emerging field that is competitive and requiring innovation to stay relevant

Established in 2012, Unicommerce Esolutions (Unicommerce) is an e-commerce enablement platform, specializing in software as a service (SaaS) for processing transactions. A comprehensive suite of solutions ensures seamless end-to-end management of e-commerce operations for brands, retailers, and logistics providers. These include a seller management panel for marketplaces, a multi-channel order management system, an omni-channel retail management system, a warehouse and inventory management system, post-order services for logistics tracking and courier allocation, and a payment reconciliation system. Additionally,several sub-modules can be used by customers for their routine operations. The software ensures that the orders received from clients are processed correctly, efficiently and within timelines.

Unicommerce products also enable plug-and-play integrations, seamlessly connecting other critical components of a client’s supply chain stack, such as their own apps and websites, marketplaces, logistics service providers, point of sales (PoS) systems, and financial and enterprise resource planning(ERP) systems for automated data exchange and for exchanging critical operating instructions with sales systems to enable end-to-end automation. The company has an extensive suite of technology and partner integrations, comprising 131 marketplaces and webstore integrations, 101 logistics partner integrations and 11 ERPs, PoS and other systems integrations.

Unicommerce has been able to create a large, growing base of marquee clients across the retail and e-commerce landscape in India as well as consistently onboarding new clients in international geographies. Clients, inter alia, include direct-to-customer brands(D2C), brand aggregators, traditional offline brands, e-commerce retailers, marketplaces, third-party logistics and fulfillment players, and small and medium businesses (SMBs). They belong to various sectors including fashion (apparel, footwear, and accessories), electronics, home and kitchen, FMCG, beauty and personal care, sports and fitness, nutrition, health and pharma as well as third-party logistics and warehousing.Zivame, Fabindia, TCNS (W, Aurelia), Pharmeasy, WoW Skin Science, BoAT Lifestyle, Portronics, Emami, Cello, GNC, and GOAT Brand Labs are some of the marquee clients.

Growth strategies include expanding the Indian business, expandingthe international footprint, (iii) enhancing the existing SaaS products and building advanced features for more use cases, and investment in and development of recently launched SaaS products, and developing additional and complementary products to expand the portfolio.

Promoted by AceVector (earlier Snapdeal), Unicommerce is backed by SoftBank through SB Investment Holdings UK.

Object of the offer

Comprises a net offer of up to 2,56,08,512 equity shares.

The OFS by the selling shareholders comprises up to 94,38,272 shares by AceVectorand up to 1,61,70,240 shares by SB Investment Holdings UK.

Will not receive any proceeds from the offer. All the offer proceeds will be received by the selling shareholders, in proportion to the offered shares sold by the respective selling shareholders as part of the offer.

Strengths

The largest e-commerce enablement SaaS products platform, acting as the nerve centre for business operations of clients. The market for e-commerce enabled SaaS in transaction processing presents a substantial and growing opportunity. The total addressable market was estimated at approximately US $ 1.2 billion in 2023 and is projected to grow in the coming years.

Has a comprehensive and modular suite of products with a wide range of plug-and-play integrations. Products and solutions are flexible and configurable, rending them suitable for different workflow needs for clients based on their business size, supply chain network, and industry-specific requirements.

Has a large, growing and diversified base of marquee Indian and global clients with long-term relationships and has the capability to upsell or cross-sell new and additional products.

The products and its plug-and-play integrations operate on a proprietary technology platform built to service client needs across different scale of operations by the number of SKUs, facilities, size, locations, hours of operations, complexity of client’s supply chains, and the variation of processes across the type of business and industries.

Has achieved consistent profitable growth, with strong cash flows, on the back of its revenue model being based on a transaction fee along with monthly minimum commitment for its enterprise clients. Further, the pricing and billing model allows revenue on incremental transactions processed by clients. Revenue will grow as volumes on the platform increases. Revenues climbed 15% in FY2024. Net cash flow from operations was Rs 6.0 crore in FY 2022, Rs 14.58 crore in FY 2023, and Rs 7.82 crore in FY2024.

Weaknesses

Failure to develop new products and innovate products may adversely affect the business.

Revenue growth and profitability may be impacted on inability to maintain the existing clients or attract new clients.

The business and growth are correlated with the growth of the ecommerce industry in India. Any change in the nature of the ecommerce industry in India will impact the business operations.

The market for SaaS solutions is competitive and characterized by rapid changes in technology, client requirements, industry standards, and frequent new product introductions and improvements.

Success depends, in part, on the ability to expand the use of the products by clients globally. Accordingly, the business is susceptible to risks associated with international operations.

The business depends on theclients continuing to use the products with minimum usage commitments and purchasing additional subscriptions. Any decline in its client retention could harm future performance.

A portion of the business is dependent on the dropship volume of the clients. Any difference in arrangement will adversely affect the business operations.

The Top 10 clients contributed 27.4% of the total revenue in FY2024. Any future actions from these clients could have an adverse impact on the performance.

The business is subject to seasonality. Any changes in expectations could affect operations.

Uses ‘open source’ software, limiting the ability to offer products and services.

There are outstanding criminal proceedings, amounting to Rs 129.4 crore, against the promoters.

Valuation

Sales were up 15.0% to Rs 103.58 crore in FY 2024. The OPM rose 667 bps to 13.92%, leading to a 120.8% increase in OP to Rs 14.42 crore. OI increased 101.0% to Rs 5.85 crore. Interest cost went up to Rs 0.39 crore. Depreciation jumped312.0% to Rs 2.4 crore. PBT spurted97.3% to Rs 17.48 crore. Tax expenses advanced84.7% to Rs 4.40 crore. Net profit stood at Rs 13.08 crore as against Rs 6.48 crore in FY2023

At the higher price band of Rs 108, the offer is made at around 85.6 times FY2024EPS (of Rs 1.3).

There are no listed peers