India’s fastest growing unicorn (Infra.Market)

Growing Unicorn India

Compiled by Ayush Thakkar

Infra.Market is a one-stop solution for types of construction material requirements. It was started by IIM Ahmedabad alumnus Aaditya Sharda along with his friend Souvik Sengupta, a CA and IIM Bangalore graduate, in 2016. It is an end-to-end constructions solution startup. With their combined experience and deep knowledge in the industry they knew that the construction industry made up approximately 10% of the country’s GDP. The Co-founders decided not to open their shop in metro cities like Mumbai, or Bangalore, or Hyderabad but in Thane which is close to the action. 

Starting a technology business in construction industry is one of the hardest as it’s one of the least digitized industries after the agriculture sector. is basically a B2B online procurement marketplace where they provide construction and real-estate materials with the help of technology to offer fair pricing. They gave wholesale prices and affordable credit or finances to small business which is not easily available in such industries. 

In the first year during FY17 the company recorded sales worth ₹12.5 crores and in second year during FY18 they accounted revenue of ₹30 crore. The company was profitable since day one. In 2018 they were getting approximately 30 customers daily. To expand in this cut-throat competitive market, they needed a lot of funds and in beginning, despite being profitable they weren’t able to raise funding. Fortunately their constant perseverance paid off and finally in August ,2019 raised their first seed round of $3.5M. Accel was their first institutional investor. This seed round investment was just a start and what achieved after this is remarkable. Again in 2019 during mid-December Infra.Market raised $26M in which $6M were from venture capitalist (VCs). After raising money, the company expanded in cities like Hyderabad, Chennai, Ahmedabad. 

And now, fast forward to February 2021. The co-founders got a call from an American Hedge fund giant Tiger Global. This meeting lasted only 12 minutes and the co-founders were able to convince Mr. Scott Shleifer (partner at Tiger Global) that they will deliver the desired results. This resulted into getting a term sheet of $100M at a valuation of $1Billion. Their valuation jumped from $180M to $1billion in just 12 minutes. The unicorn co-founders, on their part, delivered on their promise. The sales target was met in two months! Five months later in August they were once again on a call with Mr. Shleifer and this time he pumped in $125M at a valuation of $2.5B. 

In five rounds of funding, starting from June 2019, the valuation of the B2B construction solutions startup has upsurged from $15 million to $2.5 billion. Perhaps more impressive is that revenue growth has kept up with the pace: From ₹12.54 crore in FY17 and ₹63.21 crore in FY19 to ₹350 crore and ₹1200 crore in FY20 and FY21, respectively. 

The fairy tale of Infra.Market took a hit in March 20, 2022. The co-founder was startled when the Central Board of Direct Taxes (CBDT) issued a media release in which a large number of incriminating evidences were seized during a search operation conducted by the Income Tax (IT) department. “Evidences revealed that the group has booked bogus purchases, made huge unaccounted cash expenditure and obtained accommodation entries, aggregating to the tune of over ₹400 crore,” 

The co-founders said that their company/startup was not the first one which faced income tax or GST queries. He added that the unicorn tag made it a much more, worse situation than it really was, he also said that this is a worse or the flip side of getting a unicorn tag. “Unicorns” have to live with extremes he added. 

The founders said that they cooperated with the officials and provided all the necessary documents. For it was a near death experience, the allegations of ‘shell companies’ and getting foreign funding via Mauritius route were devastating. All the stake-holders were facing losses but only positive thing was the way in which the co-founders handled the situation. That is the reason Investors call it the “Amazon of Construction”. You always need tough people like Aaditya & Souvik to pass through such difficult times, that’s why it is said that “When the Going Gets Tough, the Tough Get Going“.