Construction material firm Infra.Market to raise $150 mn from Varde Partners

Mumbai: Business-to-business construction material startup Infra.Market will raise $150 million from Varde Partners. The capital will be raised through issuance of convertible instruments, and is part of the company plans to raise funds ahead of its initial public offering plans, said two people aware of the development.

The company counts Accel Partners, Evolvence India, Sistema Asia Fund, Foundamental Gmbh and Nexus Venture Partners as its other investors. In June 2022, Infra.Market raised $50 million in growth capital from Liquidity Group’s MARS Unicorn Fund, valuing it at $2.5 billion.

“The convertibles will translate into equity shares around the time the company goes for an IPO,” the first person quoted above said. The company is looking to hit the public markets in next 18-24 months.

“Around $100 million will be used to acquire majority ownership in Strata Geosystems (India) from US-based Glen Raven Inc., maker of technical and performance textiles,” the first person quoted above said.

Strata is into geosynthetic manufacturing and soil reinforcement technology. They are addressing the evolving needs of the infrastructure sector for such applications as retaining walls, reinforced soil slopes and embankments in highways, landfills, mines, railways, ports, container yards and more.

Founded by Souvik Sengupta and Aaditya Sharda in 2016, Infra.Market uses technology to provide a procurement experience for all players in the construction ecosystem. It focuses on high-volume construction products under its own brands and aims to solve issues such as a lack of price transparency, unreliable quality, fragmented vendor base, and inefficient logistics. It is currently present across 20 states in India and has also recently set up its global offices in Singapore and Dubai.

It has now gone beyond B2B and has expanded its focus on retail and B2C opportunities and built its own private labelled brands.

For the financial year ended 31 March, 2023, the company has clocked ₹11,000 crore of revenues with ₹650 crore of Ebitda and ₹300 crore in profit after tax, the third person cited above said. The company is yet to officially file its results for FY23.

In October last year, Infra.Market reported a profit after tax of ₹186 crore in FY22, up from ₹36 crore in FY21, on the back of horizontal expansion, the company said on Thursday.

The company said it saw its revenues grow 5x to ₹6,236 crore for the financial year ending March 31, 2022, over the previous year. Its operating profitability or earnings before interest tax, depreciation and amortization or Ebitda grew 6x from ₹69 crore to ₹410 crore.

“The Ebitda margins saw substantial improvement as it increased from 5.5% in FY21 to 6.6% in FY22,” the company said.