LeadSquared losses mount 2.5X in FY23, revenue grows 32%

SaaS platform LeadSquared turned unicorn in June last year when it secured $153 million in Series C funding led by WestBridge. The large round, however, did not help the firm achieve any notable growth in FY23. At the same time, its losses mounted 2.5X.

LeadSquared’s revenue from operations grew 32.6% to Rs 256 crore in FY23 from Rs 193 crore in FY22, according to its consolidated financial statement.

Financial FY23

To check detailed 3 year financial comparison on thekredible.com

Founded by Nilesh Patel, Prashant Singh, and Sudhakar Gorti in 2011, LeadSquared provides sales, marketing, and onboarding automation solutions. The sale of software services formed 82.42% of the total operating revenue which surged 27.1% to Rs 211 crore in FY23. Remaining income came from what the company describes as “foreign contracts.”

The company claims to have more than 2,000 customers across education, healthcare, BFSI, real estate, automotive, and hospitality industries. Some notable customers are Byju’s, Dunzo, Uni, Practo, and Olx among others.

Employee benefits accounted for 59.4% of overall expenditure. This cost grew 90.8% to Rs 271 crore in FY23 which also includes Rs 6.5 crore as ESOP cost which is non-cash in nature.

Expense Breakdown

FY22

Total ₹ 262 Cr

FY23

Total ₹ 456 Cr

• Employee benefit expense

• Legal professional charges

• Advertising promotional expenses

• Cost technical services

• Others

To check complete Expense Breakdown on Thekredible.comView full data

Its technical cost which includes server information and technology expenses along with legal-professional, advertising and promotional expenses pushed the total expenditure 74% to Rs 456 crore in FY23. Check TheKredible to see detailed expense breakup.

Revenue Breakdown

FY22

Total ₹ 193 Cr

FY23

Total ₹ 256 Cr

To check complete Revenue Breakdown on Thekredible.comView full data

Even as expenses outpaced the revenue growth, losses for the Begaluru-based firm spiked 2.5X to Rs 161 crore in FY23 from Rs 62 crore in FY22. Its ROCE and EBITDA margin stood at -22.12% and -51.79% respectively. On a unit level, it spent Rs 1.78 to earn a rupee of operating income in FY23.

FY22-FY23

	FY22	FY23
EBITDA Margin	-28.93%	-51.79%
Expense/₹ of Op Revenue	₹1.36	₹1.78
ROCE	-43.06%	-22.12%

With a focus on global markets and opportunities, one can understand the potential investors saw in LeadSquared to make it a unicorn in its last funding round. However, the market remains extremely competitive, with the risk of global majors entering the same business looming over the business all the time. For instance, SalesForce, whose platform LeadSquared actually supports. The firm has done well to acquire a strong cohort of clients, but growth will be limited from upselling, and driven more by new acquisitions, no easy task.