HealthifyMe posts Rs 185 Cr revenue in FY22, losses surge 8X

Consumer-focused healthcare companies were on the rise during peak covid due to surge in demand. One such company is Khosla Ventures-backed HealthifyMe which managed to grow more than two fold during the fiscal year ending on March 31, 2022, or FY22.

HealthifyMe Wellness Private Limited, the Indian entity of the group, posted Rs 185.25 crore revenue in FY22, a 2.15X jump from Rs 86.05 crore in FY21, according to the company’s standalone financial statements filed with RoC.

FY22 was a productive period for the company during which it raked in $75 million in its Series C funding round last year led by LeapFrog and Khosla Ventures at a valuation of $500-600 million. The company has raised over $100 million to date.  The company also conducted an ESOP buyback program worth $12 million to provide liquidity to almost 100 of its current and former team members.

HealthifyMe, a decade old company launched by Tushar Vashisht, Sachin Shenoy and Mathew Cherian, uses a combination of software, wearable devices, and fitness trainers to help people reach their fitness goals. It claims to be used by over 30 million users and has 2,000 coaches across India and Southeast Asia to support these users.

As per Fintrackr’s analysis, sales of nutrition and wellness services are the major source of revenue for HealthifyMe which increased 96% to Rs 111.63 crore in FY22 from Rs 56.96 crore in preceding fiscal year (FY21). The Bengaluru-based company also booked Rs 72.1 crore in FY22 as sale of support services to the parent company. The figure stood at Rs 27.27 crore a year ago.

Moving over to the cost sheet, we see that advertisement and promotion was the largest cost center for HealthifyMe forming 39% of the overall cost which grew 5.2X to Rs 133.18 crore in FY22.

Employee benefit expenses and fees to healthcare consultants are the other major expenses followed by the cost of advertisement for the health and wellness company which surged 3.3X and 3.1X respectively. These costs shot up to Rs 93.84 crore and Rs 80.25 crore in FY22 from Rs 28.13 crore and Rs 25.47 crore in FY21.

Software and subscription cost for HealthifyMe shot up 3X to Rs 8.13 crore in FY22. The company added another Rs 3.21 crore as legal and professional charges pushing the overall cost 3.24X to Rs 343.44 crore in FY22 from Rs 105.82 crore in the previous fiscal year (FY21). With a huge surge in the overall cost, losses of the company jumped 8.26X to Rs 157 crore in FY22 from Rs 19 crore in the preceding financial year (FY21).

As the overall cost ballooned, cash outflow from operating activities also spiked 20X to Rs 84 crore in FY22. On a unit level, HealthifyMe spent Rs 1.85 to earn a single unit of operating revenue, whereas the figures for the same stood at Rs 1.23 in the previous year (FY21).

In April, HealthifyMe claimed that it had crossed $50 million (around Rs 375 crore) revenue run rate in January 2022, and aims to cross $100 million (nearly Rs 800 crore) in ARR in the next 8 months. It has also set a target to cross turnover of $500 million by 2025. As per media reports, HealthifyMe may plan to go public by 2024.

After the first wave of the coronavirus pandemic, HealthifyMe also launched HealthifyStudio last year which offers live group workout sessions. The company competes with GOQii, Tata Digital-owned Cure.fit while streaming platforms such as Disney+ Hotstar and YouTubers are its indirect competition. In June 2020, Disney+ Hotstar entered into a strategic alliance with Brilliant Wellness, Cure.fit and Sarva to offer global health and wellness content to its subscribers.

The firm’s ambitious targets are a direct function of the funds it has raised, or vice versa, depending on your perspective. But there is little doubt that while the managed health services or support market has emerged in a big way in India, it is tough to predict just how far this market can grow. Will it prove to be a shallow market with a potential 100 million active users, or could it lend itself to deeper penetration with 150 million users? HealthifyMe is certainly looking to find that out in the coming months, seeing the rate at which it is burning through advertising campaigns to discover new users.