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Fintech startup XoXoday has reported a slower growth in FY23 as compared to a 2.5X jump in its collections during FY22. Significantly, the company’s losses ballooned about seven-fold in the last fiscal year on the back of increased employee benefit and advertising costs.
Xoxoday’s revenue from operations grew 20% to Rs 816 crore in FY23 from Rs 680 crore in FY22, its annual financial statements filed with the Registrar of Companies shows.
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Xoxoday offers infrastructure that lets businesses automate rewards, incentives, and payouts across the value chain. Its product portfolio consists of Plum, Emplus, and Compass for rewards, employee engagement, and incentive computation.
Revenue from the sale of different kinds of vouchers constituted 97% of the total collections which grew 18.4% to Rs 791 crore in FY23 from Rs 668 crore in FY22. The rest of the income came from commissions and other operating activities. See TheKredible for the detailed revenue breakup.
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Revenue Breakdown
FY22
Total ₹ 680 Cr
FY23
Total ₹ 816 Cr
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Being a gift provider and loyalty management firm, the purchase of coupons and rewards from the brands accounted for 83% of the total expenditure. In the line of scale, this cost increased by 16.1% to Rs 729 crore in FY23 from Rs 628 crore in FY22.
Xoxoday’s employee benefits, information technology, legal-professional, advertising and other overheads pushed its overall cost 27.1% to Rs 881 crore in FY23 from Rs 693 crore in FY22.
Check TheKredible for the detailed expense breakup.
Expense Breakdown
FY22
Total ₹ 693 Cr
FY23
Total ₹ 881 Cr
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Cost of procurement
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Employee benefits
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Information technology expenses
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Legal professional charges
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Advertising promotional expenses
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Others
As the expense growth outpaced its revenue , Xoxoday’ losses spiked 6.8X to Rs 62 crore in FY23 from Rs 9 crore in FY22. Ist ROCE and EBITDA margin stood at -90% and -6% respectively. On a unit level, it spent Rs 1.08 to earn a rupee in the fiscal year ending March 2023.
FY22-FY23
| FY22 | FY23 | |
|---|---|---|
| Expense/Rupee of ops revenue | ₹1.02 | ₹1.08 |
| ROCE | -10% | -90% |
| EBITDA Margin | -1% | -6% |
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While the spike in losses might be a little worrying, at this stage, they will be nothing more than a distraction for the firm as it seeks a strong footing in the market. The challenge in the rewards, incentives and loyalty management space is not the lack of, but plethora of options that exist, even for a platform to curate and offer as a pack to its customers. The really strong players will be able to build in perception and organisation filters that attract the best products and services to them on good terms.
Xoxotoday seems to be close to reaching that level, albeit conditionally, as competition remains intense. It will be no surprise if this is the sort of space where a Unicorn like Cred jumps in, as it seems to be getting closer to it all the time with launches like its recent Garage option for users. Watch this space to track if and when that happens!
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