Jumbotail’s scale remains flat in FY21, reduces losses by 32%

Covid-19 had eaten up the scale of most of the e-commerce companies due to lockdowns and other restrictions in FY21 but some even managed to grow in the adverse times. One such company is B2B e-commerce platform Jumbotail.

The Bengaluru-based company’s operating revenue increased 8.8% to Rs 123.17 crore in FY21 from Rs 113.17 crore in the previous fiscal year (FY20), as per its annual financial statement filed with the Registrar of Companies (RoC) early this week. 

Jumbotail connects Kirana stores with brands and producers via its marketplace. The platform primarily deals in staples, spices, dry fruits, packaged foods, and FMCG products besides providing technology and fintech solutions.

As per Fintrackr’s analysis, the sale of fast-moving consumer goods (FMCG) products constitutes 83.8% of the operating revenue which stood at Rs 103.24 crore in FY21. The verticals saw almost similar revenue figures—Rs 102.78 crore—in FY20.

The rest of the operating revenue came from commission and shipping fees which shot up 99% and 74% to Rs 14.71 crore and Rs 5.22 crore respectively in FY21.

When it comes to expenses, the cost of raw materials was the largest cost center for the company dropping 3.2% to Rs 100 crore in FY21 from Rs 103.29 crore in FY20.

Employee benefit expenses emerged as the second largest cost element for the seven-year-old firm which decreased 5% to Rs 21.28 crore in FY21 from Rs 22.41 crore in FY20. Jumbotail also spent Rs 11.63 crore on contract-based employees during FY21.

Transportation expenses contracted 11.9% to Rs 11.87 crore in FY21 while costs for software and subscription remained flat at Rs 4.6 crore in both fiscal years.

Importantly, Jumbotail stayed away from advertising and marketing during the pandemic-laden fiscal year. As a result, these two cost elements shrank 71.5% to Rs 1.07 crore in FY21. The company also spent another Rs 2.2 crore on legal and professional fees which pushes the overall cost to Rs 171.43 crore in FY21. Jumbotail’s total expenses stood at Rs 182.95 crore in FY20.

As the total expenses went down, losses at Jumbotail reduced by 32.3% to Rs 43.9 crore in FY21 from Rs 64.8 crore in the previous fiscal year (FY20). The company managed to reduce its cash outflow from operations by 10.9% to Rs 47.51 crore in FY21. The board at Jumbotail implemented austerity measures to reduce costs, resulting in the improvement of ROCE and EBITDA margin during the fiscal year.

On a unit level, Jumbotail spent Rs 1.39 to earn a single rupee in FY21.

Looking at Jumbotail's annual financial statement, it is apparent that the company is focused on expenses as much as growth. Significant cuts across advertising, transportation and employee benefit costs have helped the company improve its unit economics. With a competitive landscape that includes deep-pocketed Udaan, Shopkirana, Ninjacart, and Waycool in FY22 and the ongoing fiscal year (FY23), Jumbotail seems prepared to wait it out before seeking hyper growth. It will probably do well to seek expansion into some higher margin categories as well, as its existing categories seem destined to be low margin and hyper competitive for some time to come.