Subscription commerce is going through a consolidation phase this year. After the acquisition of SuprDaily, Doodhwala shut its operations while DailyNinja is getting acquired by e-grocer BigBasket. The only significant player left in the segment is Milkbasket.
While the firm is trying to raise capital, it filed its annual financial report for the fiscal year ending March 2019. According to the report, revenue from operations increased by 2.88X to Rs 84.5 crore in FY19, up from Rs 29.3 crore in the previous fiscal.
The Gurugram-based company earned Rs 83.5 crore from selling goods and another Rs 98.63 lakh by providing ancillary services. Meanwhile, the total expenses shot up 3.11X to Rs 94.18 crore in the last fiscal from Rs 30.24 crore in FY18.
While the expenses soared, Milkbasket’s losses blew up 10X to Rs 9.54 crore in FY19 from a mere Rs 95 lakh in the preceding fiscal. Importantly, the outstanding losses of the company stood at Rs 11.61 crore in FY19, up from Rs 2.06 crore in FY18.
Purchase of stock in trade is the biggest cost factor for the company, making up 87.17% of the total expenses by the company during FY19. These purchases grew nearly 3X from Rs 27.8 crore in FY18 to Rs 82.1 crore during FY19.
To manage the growing scale, the company increased its workforce which was clearly reflected under employee benefits which grew 5.02X to Rs 2.11 crore in FY19 from Rs 42.2 lakh in FY18.
The company worked hard to improve its visibility in the market, spending Rs 4.73 crore on advertising and promotion. This is a 14.8X jump in FY19 from only Rs 32.74 lakh in the preceding financial year.
The net cash outflow from operations stood at Rs 5.31 crore in FY19. It’s worth noting that the company had generated positive operating cash flows of Rs 4.7 lakh during FY18.
The above figures hint that while Milkbasket has spent substantially more money on its operations, the company has not succeeded in scaling up its revenues efficiently.
Burning cash helped the company to achieve a 188.4% jump in revenues. In contrast, its losses spiked by a whopping 900% during the year ended in March 2019. Clearly, revenue hasn’t kept pace with expenditure.
Given that Milkbasket has downscaled operations across locations and is focusing on turning profitable this year, its burn rate is expected to go down in the ongoing fiscal.
Milkbasket is the only independent play left in the subscription commerce or micro-delivery space. It would be exciting to observe how the company evolves from here.