Jar’s revenue soars by 5.6X in FY24, marketing cost dips 57%

Tiger Global-backed gold savings platform Jar reported a 5.6X increase in operating revenue in the last fiscal year while reducing its losses by 15% during the same period. Significantly, this growth was achieved despite a 57% reduction in marketing costs in FY24.

Jar’s revenue from operations leapfrogged to Rs 49 crore in FY24 from Rs 8.7 crore in FY23, its consolidated annual financial statement filed with the Registrar of Companies (RoC) shows.

Jar operates as a digital financial services platform and makes money on transactions and the sale of gold. Its revenue sources were split into two primary categories: sale of traded goods and commission income.

The sale of traded goods (gold) contributed Rs. 27.24 crores (55.6% of total revenue), while commission income accounted for Rs. 21.78 crores (44.4% of total revenue). Jar also made Rs 7.4 crore from interests and savings in FY24 which pushed its total income to Rs 56.41 crore.

Similar to other growth oriented fintech startups, employee benefits was the biggest burn which formed 42.8% of total cost for Jar in FY24. This expense rose 66.8% year-over-year to Rs 68.7 crore in the last fiscal. Importantly, out of the 68.7 crore Rs 26.8 crore loss was incurred on employee stock options (ESOPs) which was non cash in nature.

To check complete Expense Breakdown visit thekredible.comView full data

Unlike FY23, Jar pulled the plug from aggressive marketing in the last fiscal and its expense on marketing fell down by 57% to Rs 29.27 crore. The company also spent Rs 22.7 crore for buying materials, rent et al.

While Jar’s scale shot up 5.6X in the fiscal year ending March 2024, its total expenditure grew only 16.26% and stood at Rs. 160.38 crore. Due to effective cost management, Jar has managed to cut down losses by 15.47% to Rs Rs 103.97 crore in FY24. Its ROCE and EBITDA margin stood at -121.79% and 180.68%, respectively. On a unit basis, Jar spent Rs 3.27 to earn a Rupee of operating revenue in FY24.

According to the startup intelligence platform TheKredible, Jar has raised over $60 million to date, with a valuation of approximately $325 million. Co-founders Nischay Babu AG and Misbah Ashraf collectively hold a 44.96% ownership stake in the company.

Living through a significant bull run in gold investment, the startup will hope to do better in the current year, in terms of topline as well as marketing costs. A key aspect here is building consumer trust in the platform, where one feels more could have been done by many of the digital gold platforms. Otherwise, as the cohort of regular investors swells, marketing should be easier for the firm in any case.  The Tiger global backed firm ticks many of the key boxes for consumers, be it its storage tie-up with well known vault firms or a simple interface for investing and tracking. However, for all that, it will not be reassuring for a customer to see her gold investment firm run up major losses for too long. Competition from other startups and other legacy firms will also ensure that path to profitability will not be easy ride, making it incumbent for the firm to consider key moves carefully.