Venture-funded startups are mysterious when it comes to fundamental business metrics such as revenue, burn and profit. A majority of large-scaled startups in e-commerce segment at least doesn’t mind the aforementioned holy grail. One such company that suffers from an inability to make substantial revenue is classifieds major Quikr.
A decade-old entity has posted a consolidated revenue of Rs 64 crore in FY17. While this is a 55 percent increase in revenue as compared to Rs 41.2 crore in the previous fiscal, the given figure is consolidated revenue. It essentially means that it includes revenue of various subsidiaries.
So the aforementioned revenue is combination of over half a dozen vertical startups Quikr had acquired before 31st March 2017. The Bengaluru-headquartered company had taken over many verticalised competitors including Commonfloor, Grabhouse, Hiree, Stayglad, and Zapluck among others.
Since some of these companies work as separate entities (at least on paper) from Quikr, the Tiger Global backed company appears to have counted their revenue in filing its financials with Ministry of Corporate Affairs.
Meanwhile, the RoC filings also reveal that its losses reduce to Rs 305 crore in FY17 from Rs 534 crore. Reduction in marketing expense and lesser competition seems to have helped companies to control losses by 42 per cent.
An Economic Times report reveals that these revenue numbers don’t reflect the cumulative revenue (including acquisitions) for the company. However, we failed to understand this as consolidated revenue primarily covers financial statements of a parent and its subsidiaries together.
The company has claimed cumulative revenue of Rs 109 crore (including revenue of acquired portfolio). Contemplating its revenue for FY18, it claimed to Rs 202 crore with losses further squeezing to Rs 121 crore.
Last month, owing to dismal performance and poor future outlook, Quikr prime backer AB Kinnevik had markdown its valuation by 12 percent during the calendar year 2017. So far, the company had raked in over $430 million risk capital across 8 rounds from eBay, Tiger Global, Coatue Management, Falcon Edge and others.
Over the years, Quikr financials aren’t understandable and have no reasoning for many analysts and entrepreneurs including us. When will it start making significant revenue and show the profit on the balance sheet? Given that it’s a 10 years old company and had raised plenty of capital, the above revenue is far from fair. In fact, it’s nominal.