Fintech unicorn Coda Payments CFO says no plans to seek external funding in next 1-2 years, bats for clear regulation, CFO News, ETCFO
Abhi SharmaCFO of profitable fintech unicorn Coda Payments, which collects payments for online game publishers and other digital content providers, is confident of driving growth through a challenging macro environment.
The financial manager does not envisage external funding in the next 1-2 years. However, he said that the next few quarters are likely to be challenging and therefore decisions on material investments must be made even more critically than before. Emphasizing that India is the main market for Coda Payments, Sharma laid out a clear regulatory framework in the country, saying it will help the industry reach its full potential.
Coda Payments was founded in 2011 and is based in Singapore. It has raised a total of $715 million in funding over five rounds, the most recent funding round being a Series C in April 2022 for $690 million, valuing it at over $2 billion. The company had over $300 million in revenue by 2021. Edited excerpt from interaction with the CFO:
Q: The macro environment globally, including India, looks a bit gloomy. How does the growth for Coda Payments take shape against this backdrop?
Abhi Sharma: While it is impossible to predict when the current macroeconomic challenges will disappear, it is encouraging to see some indicators beginning to reverse their recent worrying trends. For example, US inflation peaked at 9.1% in July and has fallen for four consecutive months to 7.7% in October.
Asia’s growth economies – including India – are likely to weather this storm better than lower-growth economies facing stagflation. From a Coda perspective, we continue to believe in our strategy to build a leading global digital content monetization platform.
We are fortunate to operate in a growth industry and believe that this already large global market will continue to expand at a rate that is several times the global average economic growth. But we also recognize that the next few quarters are likely to be challenging, so decisions on material investments must be made even more critically than before..
Q: How important is India to Coda? Do you have any revenue projections to share?
Abhi Sharma: India represents one of the biggest market opportunities for global app publishers given the size of the country’s young online consumer base. Expectations are that an estimated 600 million players will join the Indian gaming ecosystem in the next few years. However, a clear regulatory framework is required for this industry to reach its full potential. Coda remains committed to helping customers monetize content in India and, as a company dedicated to providing consumers with access to the best global content, is it well positioned to activate this ecosystem. In accordance with the company’s guidelines, we do not share country-specific revenues.
Q: Startup funding has been a little lukewarm lately. Do you foresee any funding challenges into 2023?
Abhi Sharma: Coda has been a profitable company for several years, so it does not depend on external funding for its growth plans. Therefore, we have no current plans to apply for external funding in the next 1-2 years.
Q: You operate in more than 60 territories…What are the challenges you face in your role as CFO given the diverse nature of operations as well as different regulatory frameworks?
Abhi Sharma: The challenges Coda’s finance organization faces are primarily related to the setup and ongoing management and reporting of our global subsidiaries. Each subsidiary requires attention and effort when it comes to financial and tax reporting, and group consolidation.
In many countries, Coda also receives and handles transaction volumes in local currency, which are collected from payment channel operators. Handling currency conversion and remittances requires significant coordination across a range of financial partners, including banks and non-bank financial institutions. Coda also helps many of its customers manage their tax obligations around the world where they sell their content to end users.
Understanding the existing tax environment, and monitoring the same for any changes that occur, also requires constant attention and effort. Finally, running a company with a global workforce spread across 30+ geographies poses its own unique operational challenges, including e.g. salary, statutory benefits, etc.
Q: What would be your advice to the aspiring CFOs of tomorrow?
Abhi Sharma: A CFO’s role has evolved significantly over time. I believe the most effective CFOs today help drive the organization’s strategic vision forward through informed, data-driven financial decisions and actions. As a result of these developments, there is no “ideal path” to the job.
While being a CFO requires certain skills and abilities, professionals who have gained a significant breadth—and not just a depth—of experience are likely to be better prepared to handle complex, interdisciplinary challenges..
My advice would be not to limit the lens too early; instead, focus on getting the richest learning opportunities that allow you to hone a wider range of skills in your early career, as this will give you greater leverage as you progress through your career.
I would also add that in today’s macro environment, growth ambitions need to be balanced with profitability or, for early stage companies, dealing with cash burn. It is therefore incumbent upon CFOs to strengthen the balance sheet by evaluating their cost base for overheads, while identifying and executing on commercial opportunities that can deliver meaningful near- to medium-term revenue and earnings enhancements.
If CFOs could be on solid financial footing with sufficient funding to see them through at least the next 18-24 months, it would be an effort well spent.
Q: Finally, any New Year’s resolutions or plans for 2023 personally?
Abhi Sharma: My personal goal is to spend more time traveling and reading.
