mCaffeine’s revenue declines to Rs 193 Cr in FY24

Personal care and beauty brand mCaffeine consistently grew its revenue year-on-year until FY23, rising from Rs 40 crore in FY20 to Rs 205 crore in FY23. However, the company’s scale declined by 6% in the last fiscal year due to a decrease in the sales of caffeinated beauty products.

mCaffeine’s revenue from operations decreased to Rs 193 crore in FY24 from Rs 205.3 crore in FY23, its annual financial statement filed sourced from the Registrar of Companies (RoC) shows.

The dip in sales in FY24 comes as a surprise, as the firm’s co-founder and chief executive, Tarun Sharma, had claimed that mCaffeine would achieve a 50% increase in sales during the last fiscal, with profitability in sight for FY25.

mCaffeine is a personal care brand specializing in caffeine-infused skincare and haircare products. The brand sells primarily online through e-commerce platforms and its own website.

Sale of its products was the sole source of operating revenue for mCaffeine which decreased 6% to Rs 193 crore in FY24. The Powai-based company also earned Rs 8.9 crore from interest income that took its total income to Rs 201.9 crore in the fiscal year ending March 2024.

Advertising costs dominated the expense sheet but decreased by 11.8% to Rs 106.17 crore in FY24 from Rs 120 crore in FY23. Employee benefit also dipped 2.8% to Rs 38.54 crore. Meanwhile, the costs of materials increased 12.5% and stood at Rs 67.67 crore. In the end, its total expense decreased marginally to Rs 287.33 crore in the last fiscal year.

Akin to its scale, mCaffeine’s losses decreased by 6.8% to Rs 85.41 crore in FY24 from Rs 91.6 crore in FY23. Its ROCE and EBITDA margin stood at -240.19% and -40.42%, respectively. On a unit basis, the company spent Rs 1.49 to earn a rupee of operating revenue in FY24.

The Mumbai-based company reported cash and bank balances of Rs 32 crore and current assets of Rs 108.9 crore in FY24. According to startup data intelligence platform TheKredible, mCaffeine has raised Rs around Rs 337 crore in total funding and was last valued at Rs 1,000 crore. With over 12% stake, Amicus Capital is the largest external shareholder, followed by RPSG Ventures and Paragon Partners.

mCaffeine has been seeking additional funding for over a year, but the firm has not attracted interest from new or existing investors. As a result, mCaffeine is reportedly exploring acquisition opportunities due to its unsuccessful fundraising efforts.

mCaffeine's competitor, Wow Skin also saw a 9.5% drop in revenue during FY24, while Minimalist achieved a 90% increase in its scale to Rs 347 crore in FY24, along with profitability. MamaEarth, now a publicly listed company, witnessed a decline in revenue in Q2 FY25.

mCaffeine’s troubles were not unexpected, even if the brakes on growth are a function of its efforts to extend the runway. We have highlighted the issue with high advertising costs and lack of flagship products before, and FY24 has simply delivered proof. mCaffeine clearly faces challenges that a caffeine shot looks unlikely to solve.