India is witnessing a steady rise in new startups each year, positioning the country as the fastest-growing hub for various sectors, including technology, e-commerce, retail, fintech, and quick grocery delivery. Although a significant number of Indian startups is yet to unveil their financial figures for FY23, insights from the financial results of 81 new-age tech companies provide surprising revelations about the current and future landscape of the tech industry.
Despite accumulating an impressive cumulative operating revenue of ₹1.92 lakh crore, the financial performance of these 81 Indian startups in FY23 unveils a notable contradiction. Of the 81 companies, 53 reported a combined loss of ₹36,770 crore, while the remaining entities achieved a collective profit of ₹5,675 crore. This divide becomes even more intriguing when considering that 19 of these companies are publicly listed.
As we dig deep into the financial performance of 81 Indian startups, the findings offer valuable insights into the challenges and opportunities shaping the dynamic landscape of the tech industry in India. Let’s take a look at the top gainers and losers in FY23.
Financials of Top Indian Startups FY23: Main Highlights
- In FY23, Flipkart India’s B2B arm emerged as a financial powerhouse, boasting the highest operating revenue among startups at ₹55,923.9 crore. This is the highest operating revenue reported by any of the 81 startups in FY23. Surprisingly, Flipkart B2B was also among the top loss-making startups during the last financial year.
- Udaan faced a substantial setback, with operating revenue plummeting from ₹9,897.30 crore in FY22 to ₹5,609.30 crore in FY23. The B2B trade startup’s 43.3% YoY decline in revenue was the most significant among 81 new-age startups in India during the year.
- In contrast, the tech startups that reported the highest YoY growth in operating revenue for FY23 were Zepto (1,338.7%), Ather Energy (336.6%), BookMyShow (252%), CRED (255.9%), Dunzo (317.3%), Groww (264.1%), Jupiter (1,675%), and Tata 1mg (159.5%) among others. These companies demonstrated an exceptional ability to surge ahead in terms of revenue growth during the fiscal year.
- Alongside Flipkart B2B, other top loss-making startups included ShareChat (₹5,144.2 crore) and Udaan (₹2,075.9 crore). Adding to the narrative, the losses incurred by Dunzo, backed by Reliance, nearly quadrupled, from ₹464 crore in FY22 to ₹1,801 crore in FY23. This significant surge can be pinpointed to the hyperlocal delivery startup’s total expenses, which ballooned at an alarming rate of 286%, reaching ₹2,054.4 crore in the fiscal year 2022-23.
- In sharp contrast, Zerodha emerged as the most profitable startup in India, securing ₹2,907 crore in FY23. Fintech startups Groww (₹448.7 crore) and OfBusiness (₹463.2 crore) also showcased financial prowess with profits in FY23.
- boAt, the consumer electronics startup spearheaded by Aman Gupta, witnessed its first-ever financial loss in the fiscal year ending on March 31, 2023. The company’s expenses jumped 28% YoY to ₹3,562 crore in FY23. This expense surge outpaced the commendable 17.5% YoY growth in operating revenue for the year. As a result, boAt reported a net loss of ₹129.4 crore in FY23, marking a notable shift from its profit of ₹68.7 crore in FY22.
The Indian startup ecosystem, once booming with rapid growth and funding, is facing a new reality. Most Indian startups are incurring losses primarily due to the funding crunch and rapid growth expectations from investors. In response to these pressures, startups are compelled to offer substantial discounts and promotions to attract customers, further intensifying the strain on their financial health.
Despite these challenges, an increasing number of Indian tech startups have adopted restructuring measures, including streamlining operations, eliminating non-essential business units, laying off underperforming employees, and reducing marketing budgets. As these companies adapt to the changing market dynamics and prioritize sustainable growth, the future of the Indian startup ecosystem appears cautiously optimistic.
