Milktech – a part of microdelivery – is strife with competition, with startups being acquired and funds being raised left and right, the obvious question that arises is that how much do these companies earn.
To gain some insight, let’s look at Bengaluru’s top microdelivery platform DailyNinja. In FY18, the company clocked an overall revenue of Rs 57.95 lakhs showing an increase of 88.5 per cent from Rs 30.55 lakhs in FY17.
What is interesting about this figure is that operational revenue of the company which stood at Rs 32.48 lakhs registered a growth of mere 26.5 per cent from Rs 25.68 lakhs, contributing 56 per cent to the overall revenue.
The major improvement in the revenue figure was brought by miscellaneous other income that increased 30X and a quarter of the revenue was accounted by cessation of liabilities. These two categories together brought in one-third of the revenue. The non-operational revenue of the firm grew 5.2X as compared to FY17.
Unlike rival Milkbasket, it’s worth noting that DailyNinja doesn’t count milk as well as grocery in its revenue or GMV. It largely factors in commission as revenue.
The expenses of the company, on the other hand, showed a controlled growth of 26.1 per cent to Rs 4.43 crore from Rs 3.51 crore. The largest area of expense was employee benefit costing the company Rs 2.16 crore.
Consequently, the losses of the company grew by 20.1 per cent from Rs 1.69 crore in FY17 to Rs 3.85 crore in FY18. In simple words, the company lost Rs 6.6 to earn a rupee in FY18.
Even though the company managed to reduce the gap between topline and baseline metrics in FY18, the growth in operating revenue is underwhelming, keeping in perspective how much turbulence is there in the concerned segment.
As far as funding is concerned, the company scored Rs 10.67 crore (over $1 million) led by Sequoia Capital during FY18.
This year, The Sagar Dhananjay Yarnalkar and Anurag Gupta led firm has secured Rs 40 crore (over $5 million) in two installments. One in June, led by Saama Capital pouring in Rs 20.1 crore, and the other in September, led by Matrix Partners India. Sequoia Capital and Saama Capital participate in both rounds.
It remains to be seen how these funds and expansions affect the company’s financial performance in FY19. Not to forget, that it’s not the only one doing the expansion. It faces tough competition from BBdaily in its home ground and Pune, fights SuprDaily’s dominance in Mumbai, and Milkbasket is on its way to join the race.
Looking at the gap between the performance and competition in microdelivery, one really thinks about Grofers CEO, Ablbinder Dhindsa’s comment on the viability of the segment.