Dubai Kunal Jhunjhunwala was battling an existential crisis even before the pandemic hit. Nephew of Late Stock Market Investor Rakesh Jhunjhunwala and Founder of Airpay Payment Services Pvt. Ltd saw a slowdown in business, a fall in valuation and the departure of two of its co-founders.
Cut to three-and-a-half years later, and Airpay has grown its revenue, and is poised to see profits and strong margins for the second year in a row. “The business is in a very interesting, aggressive, sweet spot now,” said Jhunjhunwala, managing director, Airpay. Tanzania, Saudi Arabia and Qatar.
Kunal co-founded Airpay in 2012 with Rohan Deshpande with a vision to simplify payments. They later brought Amit Kapoor on board as the third co-founder. Kunal and his family, including father Rajesh Jhunjhunwala and his uncle late Rakesh Jhunjhunwala, own about 80% of the company.
picked up airpay 24 crore in Series A round in 2017 from investors including venture capital firm Kalaari Capital. The VC firm holds a 15% stake in Airpay. Series A round rated 70-80 crores. Deshpande and Kapoor left in late 2019, though they still retained some shares of the firm.
In the beginning of 2020, Airpay has sold approx. 10 crore in the Series B round, but at a valuation that was less than half of the Series A,” Jhunjhunwala said.
The departure of the co-founders coincided with a downturn in business. According to VCCAsAirpay’s revenue fell nearly 13% in the financial year till March 2019 and then nearly 60% in 2019-20. Losses increased. Revenue remained stagnant the following year, when businesses around the world were struggling.
Airpay realized that its “strategic decision” was wrong, and changed course. The revenue tripled in 2021-22, and it brought in a net profit of approx. There is a loss of about 21 crore rupees 85 crores a year ago.
Airpay revenue touched in 2022-23 125 crore, says Jhunjhunwala, who was earlier head of product and technology at Hungama.com. He is expecting a sharp rise in 2023-24.
When the pandemic broke out in 2020, Jhunjhunwala was shifting a part of the operations from Mumbai to Kochi. Airpay opened its Kochi office in February 2022 with five people, and now has 150 people there. “One, we got more skilled, more disciplined and committed people. Two, there was very little accident risk,” he says.
Next was expanding the scope of the business. “Instead of just focusing on transaction fees, we are turning it into a more service-oriented platform,” Jhunjhunwala said.
Operations were restructured into three broad verticals—business acquisitions; a financial distribution business for the sale of financial products; and payment platform.
Under business acquisition, Airpay provides software solutions for revenue collection and helps businesses digitize. It built Schoolpay, a basic fee collection tool, for schools that charge 2 per charge plus transaction fee. Clients include Army Public School and Aptech.
Under the financial distribution business, Airpay enables the sale of financial products and provides last-mile connectivity. “We converted the grocery store, which currently sells toothpaste and chips, to sell insurance,” he said. balance from the payment platform.
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