Fittr revenue nears Rs 90 Cr in FY22, slips into losses

Digital fitness and nutrition community platform Fittr has managed a decent growth in the fiscal year ending March 2022. However, an eight-fold growth in its advertising cost pushed the seven-year-old firm into sizable losses in FY22.

Fittr’s revenue from operations grew 53.5% to Rs 89.19 crore in FY22 from Rs 58.11 crore in FY21, according to its consolidated financial statements with the Registrar of Companies (RoC).

The Sequoia and Dream Capital-backed firm provides personalized guidance, customized plan, diet chart, and training tools. The sale of fitness and wellness services was the major revenue driver, accounting for 92.9% of the total collections. This income increased 58.4% to Rs 82.83 crore in FY22 from Rs 52.3 crore in FY21.

The company also provides coaching services and collection from this stream grew by 11% to Rs 6.24 crore in FY22. Fittr also offers various short-term workshops related to pregnancy, diet planning and exercise science, and others. Income from these services contributed just Rs 12 lakhs to the company’s coffers.

Around 41.2% of the operating revenue came from the US as an export income. The company also has other income of Rs 78 lakhs from the interest on fixed deposits during FY22.

When it comes to cost, payment to fitness consultants formed 43.7% of the overall expenditure which spiked 59.6% to Rs 50.48 crore during FY22 from Rs 31.63 crore in FY21.

Fittr’s expenses on employee benefits jumped 2X to Rs 26.15 crore in FY22 while advertising cost ballooned over 8X to Rs 18.52 crore.

The company added another Rs 5.6 crore and Rs 4.71 crore towards legal-professional fees and technical charges during FY22 which pushed the overall expenditure by 2.09X to Rs 115.55 crore in FY22.

Unlike FY21 where it posted a profit of Rs 1.48 crore, Fittr slipped into losses in FY22 at Rs 25.41 crore. High cash burn also impacted its cash flow which stood negative at Rs 20.49 crore.

Moving to the ratios, its ROCE and EBITDA margin worsened to -46.52% and -26.74% in FY22. On a unit level, the company spent Rs 1.3 to earn a single rupee.

Fittr was bootstrapped for the first three and half years and then it joined the third cohort of Sequoia’s accelerator program Surge and raised $2 million as its first investment from the program in April 2020. It raised a bigger $11.5 million round in 2021 from Dream Capital and Elysian Park Ventures. The company directly or indirectly competes with HealthifyMe, FirBudd, Cult.fit, and others.

In a highly fragmented and unorganised category, the firm has done well to scale up. The high share of revenues from the US is also promising, as margins are likely to be both higher and more stable there. With most fees breaching the 5 figure monthly mark for its top selling options like personal fitness, Fittr will also possibly have to contend with the risk of users migrating to direct deals with the trainers for a better deal. The Pune-based firm will need to be on its toes evaluating its proposition as well as rein in customer acquisition costs to ensure a healthy balance sheet going ahead.

The Fittr Hart smart ring to track your health is one such offering and marks its entry into the hardware side of the business. But it could also mean dependence on further rounds of funding, and in a tough funding environment, that could be as tough as its most strenuous workouts.