Ebix is trying to build a stack which runs on a ‘phygital’ (physical plus digital) model. As part of this, it is looking at travel, insurance, foreign exchange, remittance (domestic and international) and wealth management services. It recently acquired Miles, a wealth management software company, for $19 million (Rs 1.4 billion). Ebix has also acquired travel website Via.Com, foreign exchange provider Centrum Direct, and international money transfer company Transcorp.
“Ebix looks at itself as an airport of sorts, which works as a non-aligned entity and allows other companies
with specific services to use its services and infrastructure. We are not a product company; we are a stack,” says Raina. To this end, Ebix partnered with Paytm and became the exclusive foreign exchange partner for the digital payments giant. Paytm is a subset of the Ebix eco-system, says Raina.
As mentioned earlier, Ebix continues to keep its eyes open for more companies
to buy, to further its hold over the Indian market. It already has a strong global presence, with customers in 69 countries, speaking 19 languages. Whie the acquisitions seem disparate to some, Ebix insists this is about building a full-stack financial services provider and that all its acquisitions fit into that vision. “These companies look diverse because the Indian market has an inherent inefficiency. Earlier, people were running this as 45 different services but it’s the same consumer who is going to buy travel, forex, insurance and gift cards,” is Raina's explanation.
While it mght seem an aggressive acquiring spree, for an international company looking to get a foothold in one of the fastest growing economies, Raina insists Ebix never takes its eyes off the profit measure when choosing companies to acquire. All the companies acquired by Ebix earn a healthy operating margin and the company aims to improve the efficiencies, to bring these to at least a 30 per cent margin, in line with its group operating margin of 31 per cent.
“VCs (venture capital entities) look at valuations based on gross merchandise value. A company like us is looking for a strong, profitable company. We want a company that generates at least 30 per cent profit margin. We are not interested in top line (revenue) for the sake of top line. For us, the bottom line (profit) is more important," says the CEO.
Ebix wants to build its business in India by becoming a supermarket of sorts for all financial companies. The presence of varied companies in its portfolio enables additional deals and partnerships with banks and financial technology entities, it adds. It hopes to increase its net commission earned on transactions from $260 million a year to $400 million by March 2019.
“That same bank becomes a partner and starts processing money, remittances, provides forex and sometimes give us technology to lend and, incidentally, allow us to lend to their clients and their distribution network,” Raina says.