Progcap crosses Rs 150 Cr revenue in FY24, cuts losses

Peak XV and Tiger Global backed fintech firm Progcap has scaled more than 5X in the last two fiscal years, from Rs 26 crore in FY22 to Rs 139 crore in FY24. The firm also managed to reduce its losses in the same period.

Progcap’s revenue from operations nearly doubled to Rs 139 crore in FY24 from Rs 71 crore in FY23, its consolidated financial statement sourced from the Registrar of Companies (RoC) show.

Progcap facilitates debt capital for underserved micro and small businesses. The fintech platform digitizes supply chains and facilitates access to finance for last mile retailers. Revenue from these services was the sole source of income for the company.

Progcap made additional Rs 20 crore from interest on deposits and gains on current investments which pushed its total income to Rs 159 crore in FY24 from Rs 102 crore in FY23.

On the expense side, employee benefit costs remained the largest expenditure, accounting for 61% of the total expense, to the tune of scale. This cost grew by 15% to Rs 124 crore in FY24. The firm’s finance costs surged sharply to Rs 22.5 crore from just Rs 1 crore in FY23. Other major expenses included collection deficiency charges (Rs 9.5 crore), travel expenses (Rs 6 crore), and miscellaneous costs.

Overall, the company’s total expenses grew by 36% to Rs 203 crore in FY24 from Rs 149 crore in the preceding fiscal year.

Progap managed to cut its losses by 6% to Rs 46 crore in FY24 from Rs 49 crore in FY23. Its ROCE and EBITDA Margin improved to -2.96% and -11.32% respectively. On a unit basis, the company spent Rs 1.46 to earn a rupee of operating revenue in FY24.

The Delhi-based firm reported current assets worth Rs 1,321 crore which include Rs 163 crore of cash and bank balance in FY24.

According to TheKredible, Progcap has raised a total of approx $112 million of funding till date, having Tiger Global, Peak XV, Creation Investments and GrowX Ventures as its lead investors. Progcap’s co-founders, Pallavi Shrivastava and Himanshu Chandra, collectively hold a 23.41% stake in the company.

In a perennially capital starved country, we have increasingly seen how firms that set out to offer services to the most underserved in the commercial sector, eventually found their calling in providing financial services. Progcap has not even had to go through that path of discovery, targeting the segment with its financial offerings from day 1.  That places it well to grow further, although the high losses until now are a little excessive, not really explained by the usual route to build a lending business in the MSME segment. Unless it has paid the usual startup rental of high writeoffs to get a fast track entry into the segment, often at the expense of traditional lenders and facilitators. The firm seems to have burnt through enough money to pick up the experience needed to make the journey a lot better from here on, and the high funding indicates some pretty big ambitions going ahead as well. Certainly a firm to watch for its FY25 performance.