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STATS & STRATS What's Hot! Sify, losses and all, halves its monthly burn rate and inches closer to profitability; and VSNL, up for disinvestment, pumps in more moolah to grab a bigger share of the access pie. Team BT If is the middle word in Sify, or so we told you the last time the portal figured in this section. Well, that's just another reason why one shouldn't write off this Satyam offshoot despite its deep shade of red. Now, the portal is again on an upswing (sentimental, that is) flashing its GAAP results for the quarter ended June 30, 2001.
The news this time is that Sify has managed to halve its cash burn rate (net reduction in cash spent per month), from $15.6 million to $7.9 million over the previous quarter. And if that seems like smart accounting PR, just consider that every penny saved during a slowdown is equal to twice as much earned during a boom. Says George Zacharias, President & COO, Sify: ''We have been able to cut down the cash burn mainly on account of tighter working capital control, lower cash losses, and a fall in capital investment as we have looked at all our costs with a fine toothed comb.'' Sales revenue, however, declined 20 per cent from the previous quarter, though the figure shows 40 per cent increase over Q1, 2000. Sify blames this on the slowdown in e-consulting and services. But the company says sales revenues are expected to grow over 20 per cent next quarter. The inhouse expectation is to achieve a break even in the current fiscal even if the parent Satyam Computers (which has a 52 per cent stake in Sify) does not make any additional investments in Sify. ''I do not see any reason for going to them,'' says Zacharias. Well, the next time we zoom in on Sify, we'll definitely take stock of that.
Q&A Austin P.M., Founder & CEO, Paisapower.com, talks to BT's Nitya Varadarajan on the p-fin portal's steady forays into corporate financing.
Paisapower seems to rework its revenue model every now and then... We started as a service provider in personal finance with a mandate to break even in three years. But with the dotcom scenario not being very encouraging, we could not wait that long. We, therefore, extended our biz model to small and medium enterprise (SME) requirements: from project preparation and financing, to bill discounting and business insurance. But how will you service customers with just an online infrastructure? For the front end (marketing), we are tying up with more agents. Direct selling agents offering just one credit card are glad to join us, because we offer them a wider portfolio and a database (about 1,000 new registrations every month and 12,500 currently). Our tie-ups with cyber cafes (54, all in Chennai) bring in it-neoliterates, and we offer them services like home loans. Where we can tie up with other fulfilling agents (like Apnaloan.com in Delhi and Mumbai) we have done so. We also have a bank of chartered accountants who do the physical monitoring of companies and their assets. What's the cash burn rate? Roughly Rs 10 lakh a month. But we have started generating revenues too. This year, we hope to do transactions worth Rs 70 crore in the SME segment-our revenues would be in the region of 2 per cent of these transactions. A brief of your financials... Paisapower was given $1 million in June 2000 by ICICI Ventures (against a 20 per cent stake) who had then valued us for $5 million. The remaining Rs 65 lakh was invested by me along with some angel investors. In January 2001, ICICI Ventures promised another Rs 2.5 crore, of which an initial tranche of Rs 1.4 crore is already in.
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