FamPay was one of the handful of companies that raised $38 million in its Series A round in FY22. The war chest of capital also helped the Bengaluru-based company grow its scale by almost 9X during the last fiscal year. But it also bled a lot of money to achieve that scale.
We will dig deeper into expenses and losses in the second half of the story but first, let’s focus on its collection. FamPay’s revenue from operations ballooned 8.7X to Rs 3.06 crore during FY22 as compared to Rs 35 lakh in FY21, according to its annual financial statements with the RoC.
Founded in 2019, FamPay operates as a neobank that enables teenagers to use semi-closed system prepaid instruments of IDFC First Bank. It allows users to make online (UPI & P2P) and offline payments without a bank account. It has a user base of over 10 million.
FamPay’s collection from facilitating payments shot up 6.7X to Rs 1.74 crore in FY22 while the company also earned Rs 1.2 crore from interchange fees on the use of prepaid cards. This income grew 13.3X from Rs 9 lakh in FY21.
Besides its operating income, FamPay also earned Rs 4.2 crore from interest and gain on investments and other non-operating revenue which took its total revenue to Rs 7.26 crore in FY22. Importantly, the company’s non-operating collection was more than its operating income.
Heading towards the expenses side, we found that employee benefit expenses constituted 42.2% of the total expenditure. This cost grew 4.1X to Rs 21.34 crore in FY22 from Rs 5.2 crore in FY21. Importantly, this also includes Rs 5.53 crore of share based payments to employees.
Spends on advertising and promotion accounted for around 30% of the overall cost which surged 3X to Rs 15.14 crore in FY22. Further, legal-professional and subscription fees swelled up 4X and 8.7X respectively to Rs 7.11 crore and Rs 2.7 crore during the last fiscal year.
FamPay also spent Rs 31 lakh on payment gateway charges. The company’s total expenditure shot up 3.8X to Rs 50.62 crore in FY22 against Rs 13.4 crore in the preceding fiscal year. In line with expenses, its annual losses also went up over three folds to Rs 43.36 crore in FY22 as compared to Rs 13.2 crore in FY21. Significantly, the company booked a profit of Rs 32 lakh in FY20, which was its first year of operations.
FamPay’s cash outflows from operating activities spiked 3.5X to Rs 39.23 crore during FY22 from Rs 11.2 crore in FY21. The growth in scale helped FamPay refine the EBITDA margin and ROCE to -583.47% and -18.06% in FY22. On a unit level, FamPay spent Rs 16.54 to earn a rupee of operating revenue during the same period.
It’s interesting that FamPay made a profit in its first year of operations but that perhaps happened because the company didn’t spend as much. And as it’s looking to expand its presence, expenses seem to be outpacing the company’s revenue column.
FamPay has raised around $42.7 million to date and its backers include Elevation Capital, Sequoia Capital, Venture Highway, Y Combinator, Greenoaks Capital Kunal Shah, and Amrish Rau among others. The company competes with NB Ventures-backed Junio which is yet to file annual financial numbers for FY22 and a few others.