B2B marketplace and retail platform Jumbotail recorded more than three-fold growth in revenue in FY22 with its gross merchandise value (GMV) going past Rs 1,100 crore. The company’s losses, however, also widened by 2.7X in the same period.
We will hold forth on the expenses and losses of Jumbotail later in the story, for now, let’s take a closer look at its revenue trajectory.
Jumbotail’s operating revenue surged 3.3X to Rs 377 crore in FY22 from Rs 123.2 crore in FY21, according to its consolidated financial statements with the Registrar of Companies.
Jumbotail is essentially a procurement platform for kirana stores and provides full-stack services, including storefront delivery and payment collection. The sale of traded goods formed 93.3% of the total collections. Income from this vertical grew 3.4X to Rs 351.7 crore in FY22 from Rs 103.2 crore in FY21.
Collection from the marketplace (commission) grew 53.9% to Rs 22.63 crore in FY22, while logistics services generated Rs 2.66 crore. It also made Rs 22.20 crore from the interest of deposits in FY22.
Jumbotail’s total GMV spiked 2.36X to Rs 1,128 crore in FY22 from Rs 477 crore in FY21.
The cost of procurement accounted for 65.6% of the overall expenditure, which grew 3.4X to Rs 341.8 crore in FY22. Its employee benefit cost shot up 2.4X to Rs 51.1 crore in FY22. This includes Rs 3.32 crore as ESOP cost which is non-cash in nature.
The cost for contractual employees and transportation saw a jump of 2.7X and 2.4X to Rs 31.17 crore and 28.95 crores, respectively. The company incurred another Rs 17.36 crore and Rs 9.16 crore on rent and advertisement which accelerated its overall expenditure by 204% to Rs 521 crore in FY22 from Rs 171 crore in FY21.
At the end, Jumbotail’s losses spiked 2.7X to Rs 121.78 crore in FY22 from Rs 43.9 crore in FY21.
Its ROCE and EBITDA margins stood at -18.92% and -10.2% respectively in FY22. It’s worth noting that we have calculated EBITDA on the basis of their total sales including the marketplace sales. On a unit level, the company spent Rs 1.38 to earn a single unit of operating revenue.
Losses keeping pace with revenue growth is never a good thing, and in case of Jumbotail, the firm will definitely hope the worst is behind it. A well-funded war chest gives it enough runway to build on its promise and strong topline performance. For firms in a similar business, high costs are usually due to a focus on keeping multiple services in-house, from logistics to transportation. While usually done for better control over quality and outcomes, a way still needs to be found to manage it better. Jumbotail probably faces a similar challenge, and it will be really interesting to see how the firm opens and discovers its path to profitability.