With a modest 9% surge in revenue, online news aggregator InShorts has had a poor run in the fiscal year ending March 2023 as the company’s bottom line worsened by more than 36%. It looks like investment into growing its location-based social network app Public made it burn more in the last fiscal year.
InShorts’ revenue from operations increased to Rs 181 crore in FY23 from Rs 166 crore in FY22, according to its standalone financial statements filed with the Registrar of Companies. This is a sharp decline compared to nearly 45% growth in revenue in FY22.
Caveat: The company is registered in Singapore, so its consolidated financial results may vary.
InShorts summarizes news stories in 60 words for handy consumption on smartphones and covers beats including politics, sports, tech, business, and world entertainment, among others. Revenue from advertising on the app was the primary source of collection for InShorts. This income grew 4.3% to Rs 147 crore in FY23. The rest of the income comes from support services.
According to Sensor Tower data, InShorts has amassed over 35 million downloads since its inception. The firm also launched location based social network Public in late 2019 which has reached nearly 220 million downloads since then.
The firm has not provided the breakdown of revenue it earned from Public app. It’s worth highlighting that InShorts raised $100 million during 2021, including a separate $41 million for the Public app.
Heading to annual expenditure, the support services fees which include the content cost accounted for 39.2% of the overall expenses in the last fiscal year. This cost increased by 24.5% to Rs 193 crore in FY23 from Rs 155 crore in FY22.
- Employee benefit expense
- Advertising promotional expenses
- Support service fees
- Legal professional charges
Its employee benefit cost also surged 27.4% to Rs 79 crore in FY23. Increased cost on employee benefits and content creation indicate that the company has ramped up capital toward growing its Public app.
InShorts’ advertisement cum promotional expenses, legal professional fees, server cost, traveling, and other overheads took the total expenditure to Rs 492 crore in FY23 as compared to Rs 399 crore in FY22. Check TheKredible to see the complete expense breakup.
The stagnant cost and high burn resulted in a 33.6% increase in its losses which rose to Rs 310 crore in FY23 from Rs 232 crore in FY22. Its EBITDA margin stood at -143%. On a unit level, it spent Rs 2.72 to earn a rupee during FY23.
|Expense/₹ of Op Revenue
InShorts’ closest competitor DailyHunt, which has raised around $1.8 billion in funding, registered 57% jump in its revenue to Rs 1,809 crore in FY23 from Rs 1,151 crore in FY22. DailyHunt managed to control its losses but still, it stood at Rs 1,900 crore in FY23.
The travails of InShorts present a very interesting conundrum. Operating in one of the world’s toughest media sales markets, the figure of Rs 150 odd crores in ad sales will put them among the top tier of digital news firms in India, outside of Google and Facebook of course. However, this is a category where growth has been tough for everyone, and will likely remain so. That makes a very strong case for InShorts to seek to replicate its model outside India using technology more smartly. At its existing costs, it is frankly unconscionable that it has to spend so much to get so far. After ‘dumbing down’ news is not something unique to the English and Hindi speaking markets in India, but a worldwide phenomenon. Pushing out strategically into more languages and niches seems a more viable proposition considering the high burn rates it has in India. Without that, we really can’t see how investors will continue to bankroll this firm after some time.