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Tracxn Technologies Limited IPO

DCX System IPO

Introduction

Tracxn Technologies Private Limited was formed in August 2012, however the name
was changed to Tracxn Technologies Limited in July 2021. Tracxn Technologies is
among the leading global market intelligence providers for private company data and
rank among the top five players globally in terms of number of companies profiled
offering data of private market companies across sectors and geographies according
to Company Commissioned F&S Report. They have one of the largest coverage of
private companies in emerging technology sectors including IoT, artificial
intelligence, virtual reality, robotics, block chain and electric vehicles. Tracxn
platform which was launched in Fiscal 2015, with a particular focus on the global
emerging technology sector, providing users with detailed profiles of companies
including detailed information of funding rounds and acquisition related
information, taxonomy and market maps, global competitor benchmarking, financial
information, valuation and capitalization tables, employee count, investor profiles,
competitor mapping, information about founders, key team and board member,
company and sector specific reports and news events. The company have an asset
light business model and operate a Software as a Service (“SaaS”)-based platform,
Tracxn, that scanned over 662 million web domains, and profiled over 1.84 million
entities across 2,003 Feeds categorized across industries, sectors, subsectors,
geographies, affiliations and networks globally, as of June 30, 2022. The platform has
3,271 Users across 1,139 Customer Accounts in over 58 countries, as of June 30, 2022.
Customers include a number of Fortune 500 companies and/or their affiliates.

 Rationale

The issue is purely an Offer for sale IPO with existing shareholders diluting their
stake. The total available market for private market data service industry is expected
to grow at a rate of close to 6.79%. Tracxn future success depends on their ability to sell
subscriptions renewals and expand the deployment of platform with existing
customers. Subscriptions from annual billing comprised 58.21%, 58.50%, 59.72%,
54.68%% and 60.90% of their total subscriptions billed to customers from Fiscals 2020
till 2022, and 3-months ended June 30, 2021 and 2022. A substantial portion of their
revenues is generated from repeat business and thier customer retention rate from
Fiscals 2020 till 2022 and in the three months ended June 30, 2021 and 2022 was 73.39%,
74.38%, 74.07%, 81.82% and 73.61%. Tracxn currently have a significantly large
customer base outside India. The company transacts in various currencies other than
the Indian rupee, which subjects them to currency exchange risks, while a large
portion of our expenses are denominated in Indian rupee. In Fiscals 2020 to 2022, and
in the three months ended June 30, 2021 and 2022, customers located outside India
generated 71.39%, 70.48%, 70.45%, 72.30% and 68.40%, respectively, of their total
revenue from operations were generated by customers located outside India in the
same periods. In Fiscals 2020, 2021 and 2022 and in the 3 month ended June 30, 2021,
our Company had restated loss for the year of Rs 54 cr, Rs. 5.35 cr, Rs. 4.8 cr and Rs. 72
lakh, respectively. They have experienced negative cash flows from operating
activities in Fiscals 2020 and 2021. While the company had restated profit for the
period of Rs. 83 lakhs in the three months ended June 30, 2022. Revenue from
operations has grown at a CAGR of 30.37% in Fiscal 2020 to Fiscal 2022. The growth of
the market is expected to be mainly dependent on the growth of number of PE, VC and
otherinvestment firms, large corporate and other entities who will be willing to invest
in private companies. As global recession is on horizon and also due to COVID-19
pandemic, companies across world may reduce spending on private market info
services offerings or delay theirM&Aactivities, which could materially and adversely
impact our business. Tracxn has significantly reduced theirleases and utilities bills by
allowing employees to WFH.

Avoid for long term investment

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