Softbank-backed payment technology platform Juspay’s operating scale spiked 2.6X in the last two fiscal years to Rs 112.7 crore in FY22 from Rs 43.1 crore in FY20. Its losses, however, ballooned 25X in the same period, according to its annual financial statements with the Registrar of Companies (RoC).
Juspay offers end-to-end payments processing technology to merchants and its flagship products include Juspay Safe, HyperSDK, Express Checkout, and UPI in a Box. The company claims to process more than 50 million online transactions daily with a gross transaction value of over $200 billion.
Fees for payment platform integration was the only source of revenue for Justpay and it surged 84.5% to Rs 112.7 crore in FY22. The company also has other income of Rs 8.12 crore in FY22 from interest on fixed deposits and gain of current investments.
Juspay’s biggest expense was employee benefits, making up 57.4% of the total expenditure. This cost surged 3.2X to Rs 129.68 crore in FY22 mainly due to ESOP expenses which grew 12X to Rs 57 crore in FY22.
Its IT cost grew 2.39X to Rs 39.6 crore in FY22 while the cost for legal-professional charges increased 19.6% to Rs 19.1 crore, which pushed the overall expenditure by 2.3X to Rs 225.80 crore in FY22 from Rs 96.7 crore in FY21.
To recall, the company scooped up $60 million in Series C round led by SoftBank Vision Fund 2 during FY22.
Juspay’s losses in FY22, however, surged four-fold to Rs 105.5 crore from Rs 25.8 crore in FY21. The ESOP expense was the major reason for the rapid rise in employee cost but if we exclude this non-cash expense, the figures stood at Rs 48.5 crore during FY22.
Its ROCE and EBITDA margins worsened to -25.35% and -84.07%, respectively, during FY22. On a unit level, the company spent Rs 2.00 to earn a single unit of operating revenue.
These numbers, while worrying to a lay observer, are pretty much par for the course in India’s fintech sector. In fact, for writers chronicling these as we do at Entrackr, sometimes it can make you wonder just who is paying for or subsidising whom, seeing as too many seem to be spending way more than they earn.
The high ESOP numbers being dragged along by expenses also point to the failure of the system to provide quality skills in reasonable numbers, something not unique to Juspay. While the fate of Juspay may or may not be settled just yet, its challenges are a stark reminder of the deep rooted, unsustainable issues plaguing the world of ‘disruptive’ startups, which seem to have caught pretty much everyone napping, except for hopeful VC’s and investors.