As the Communications Platform as a Service (CPaaS) market is experiencing robust tailwinds, driven by increasing mobile penetration, growth in digital transactions, and increasing need for digital communication with end customers, Route Mobile NSE 8.51 % expects revenues to grow by at least 40% in FY23. “Our growth guidance is the basis of the visibility of our strong pipeline and the market dynamics,” says Route Mobile MD and Group CEO Rajdip Gupta in this interview with ETMarkets. Edited excerpts

After outperforming your revenue growth guidance of 30% in FY22, you have guided growth guidance of at least 40% in FY23. What makes you so confident?

We have witnessed strong growth in demand from domestic and international customers for our products and solutions. We continue to witness growth in volumes of business, and revenue from existing customers, and at the same time have a strong pipeline of potential customers across various geographies. Our growth guidance is the basis of the visibility of our strong pipeline and the market dynamics. We have forayed into new geographic markets including Latin America, which are expected to demonstrate strong growth momentum. CPaaS as a market is experiencing robust tailwinds, driven by increasing mobile penetration, growth in digital transactions, and increasing need for digital communication with end customers. Each of these parameters drives a higher volume of transactions on our platform.

What is the outlook in terms of EBITDA margins in this fiscal year?

We expect at least 150bps improvement over the EBITDA (non-GAAP) margin that we recorded in Q4 FY22.

How much of the growth do you expect from the international part of your business?

In FY22, 52% of our revenue was driven by communication terminated (sent to mobile subscribers) in India. Moving forward, we believe that India will continue to be a major contributor to our overall revenue mix. However, with the acquisition of Masiv and MR Messaging, we believe that we will witness increased contribution from new geographies – Latin America, Asia, and Europe. We have onboarded several large enterprise clients in India and expect the revenue contribution from these clients to scale up over the year. At the same time, our teams in the Middle East, Africa, Latin America, and Europe have aggressive sales strategies and are continuously adding customers to the portfolio. We expect growth to be balanced between the domestic Indian market and global markets in FY23.

Any plans to grow inorganically in the next few quarters?

We operate in the CPaaS market, which is evolving at a rapid pace. Hence, to ensure that we capture market opportunities in time, it is essential to continuously evaluate product components/markets that we should enter organically vs inorganically. Accordingly, we have identified certain product/platform enhancements which we would prefer to drive through the inorganic route. M&A processes involve several nuances around due diligence – commercial, financial, and legal, and also evaluation of the overall fit with the target companies. Hence, although it is difficult to ascribe a definite timeline to our future acquisitions, we would like to say that we are in the process of evaluating relevant targets that fit into our overall strategy.

Can you elaborate on the industry tailwinds that are driving growth in the CPaaS market?

Thanks to the massive tailwinds during the pandemic, the digital transformation process has seen a serious uptick making CPaaS one of the fastest-growing segments.

This digital-first movement has accelerated the innovation, adoption of CPaaS, and use of flexible, plug-n-play APIs to improve and streamline customer communications & experience that continue to drive enterprises/brands forward.

Companies are spending more than ever on digital channels to interact with their customers and give them a seamless experience online as well. According to Gartner, 95 percent of companies will use CPaaS platforms to improve operational efficiency and customer experience digitally by 2025. According to Juniper Research, CPaaS sales will surpass $10 billion this year and will rise to $34 billion by 2026.

As digital adoption continues to surge, this technology simplifies communication integration, usage of messaging, new age messaging apps, voice, and video, transforming the way we interact with customers. New CPaaS use cases have emerged in the areas of telehealth, e-commerce, and retail. In addition to text message appointment reminders, healthcare organizations can use CPaaS to enable virtual waiting rooms and remote patient monitoring.

Another area of expansion is programmable video, as organizations seek to replicate in-person communication with video. Video banking, video-assisted sales, and customer support are examples of programmable video use cases.

The pandemic also compelled contact centers to implement CPaaS in order to allow agents to work remotely. To support remote work, organizations with on-premises contact centers had to quickly migrate to the cloud. Because many cloud-based contact center platforms include CPaaS APIs, the rapid adoption of cloud-based contact centers has also boosted CPaaS adoption.

Another new area that has been emerging is Mobile Identity . According to Javelin Strategy and Research, identity fraud is becoming a behemoth, with losses reaching $52 billion by 2021. According to MarketsandMarkets, the identity verification market is estimated to increase at a CAGR of 16.6%, from USD 8.6 billion in 2021 to USD 18.6 billion in 2026.

Increased digitization ambitions, a surge in fraudulent activities and identity theft over the previous decade, and rising use cases of digital identities among verticals are all driving the identity verification industry. Furthermore, initiatives by governments and businesses focusing on digitalization and the use of new technologies in identity verification systems, such as AI, machine learning, and automation, would present attractive prospects for identity verification suppliers.

Published in Economictimes.indiatimes –
Industry tailwinds, deal pipeline to help Route Mobile achieve 40% growth in FY23: CEO