Atome’s 2021 profits nearly triple as revenue sources shift

Atome, the Singa​​pore-based buy now, pay later service, posted US$192.6 million in revenue for the financial year ending December 31, 2021, more than doubling the numbers from the last FYE.

Profits jumped 2.7x to US$30.23 million, up from US$11.38 million in 2020, according to filings with the Accounting and Corporate Regulatory Authority (ACRA) from Neuroncredit Pte. Ltd., Atome’s registered entity in Singapore.

A large part of its revenue growth, however, appears to be attributable to Kredit Pintar, an Indonesian peer-to-peer lender Atome acquired in 2020.

Atome’s momentum is in line with other BNPL players in Southeast Asia, which are bucking the global downtrend faced by their counterparts in other regions like Klarna in or Afterpay and Zip in Australia, which saw their profits and value plunge.

Photo credit: Atome

While Atome remains profitable, where it makes its money has changed over the last year after a shake-up in its key markets and revenue sources.

Atome declined to comment for this story, saying that some of the information Tech in Asia requested was commercially sensitive.

The BNPL provider is a subsidiary of unicorn Advance Intelligence Group, which posted a US$3 million loss at a group level for FY 2020. (Its financials for FY 2021 are not yet available). Atome’s parent firm was also unprofitable in the previous two financial years.

Changing priorities

The main sources of Atome’s revenue are now its financial guarantee fees and platform service revenue, making up US$98 million (50.89%) and US$53.46 million (27.76%) of total revenue, respectively.

Financial guarantee fees, however, does not appear to represent Atome’s BNPL service, but rather its peer-to-peer lending business in Indonesia. Atome had acquired 100% of Indonesian peer-to-peer lender Kredit Pintar in 2020.

According to the notes to the financial statements, the financial guarantee fees are the difference between interest charged to borrowers and funding cost to the funding partners.

The merchant discount rate – or fees charged to merchants for transactions processed on the platform – saw the fastest growth, going up 18x to US$8.45 million from just US$47,000 in 2020. But it still contributes a fraction of the revenue, now accounting for 4.39% in 2021 from 0.5% in 2020.

Ad spending over internal expenses