Rupeek struggles in FY23 as its scale dwindles 27.6%

A majority of growth stage startups tend to grow their scale year-on-year but this has not been the case for online gold loan platform Rupeek, which has witnessed over 27% fall in its operating scale. 

Its founder and chief executive officer Sumit Maniyar told Mint that slowdown in funding and market have hampered its growth in FY23.

Financial FY23

Check detailed 3 year financial comparison on thekredible.com

Rupeek’s revenue from operations dwindled 27.6% to Rs 89 crore in FY23 from Rs 123 crore in FY22, according to its annual financial statements filed with the Registrar of Companies (RoC).

Rupeek provides gold loan services and claims to streamline the entire processing from underwriting to disbursal in just 30 minutes. Income from lending and commission were the primary sources of revenue for the firm. In FY23. The company also earned Rs 8 crore from interest on deposits and gain on the sale of current investments.

On the cost side, employee benefits accounted for 42.7% of the overall cost, which fell by 9.6% to Rs 161 crore in FY23. This decrease in employee cost was a consequence of its 200 employees layoff in June 2022. The development was exclusively reported by Entrackr.

Its subscription membership fees, advertisement costs, and consultancy charges are some other prime costs that  pushed the total expenditure to Rs 377 crore in FY23, a 24.4% drop from Rs 499 crore in FY22. Check TheKredible for a detailed expense breakdown.

Expense Breakdown

FY22

Total ₹ 499 Cr

FY23

Total ₹ 377 Cr

• Employee benefit expense

• Subscriptions membership fees

• Advertising promotional expenses

• Consultancy charges

• Others

To Check complete Expense Breakdown on Thekredible.comView full data

Losses for Rupeek contracted by 22.8% to Rs 281 crore in FY23 from Rs 364 crore in FY22. Its ROCE and EBITDA margin registered at -102.59% and -212.99%, respectively in FY23. On a unit level, it spent Rs 4.24 to earn a rupee of operating revenue.

FY22-FY23

	FY22	FY23
EBITDA Margin	-241.89%	-212.99%
Expense/₹ of Op Revenue	₹4.06	₹4.24
ROCE	-78.68%	-102.59%

Rupeek has raised Rs 1,190 crore or $165 million to date. According to startup data intelligence platform TheKredible, PeakXV is the largest external stakeholder with 21.57% followed by Accel, Bertelsmann, GGV Capital, Lightbox, and others. Founder and CEO Maniyar commands 19.82% of the shareholding in the company.

In a business that needs heavy investments to grow, a tight funding environment can be truly challenging, as incremental funding is a necessary requirement for growth.  Investors also use the opportunity to seek either belt tightening or even more favourable valuations, making the choice of raising money a tough call for founders. Rupeek looks like it's facing a lot of those choices right now.