Darwinbox, the HRtech unicorn backed by Microsoft, experienced a significant financial setback despite a surge in its consolidated net loss during the financial year 2022-23 (FY23). The cloud-based HRtech startup witnessed a 2.4 times increase in its net loss, reaching INR 158.25 Cr compared to INR 65.72 Cr in the preceding fiscal year. While operating revenue nearly doubled to INR 224.04 Cr in FY23, up from INR 116.73 Cr in FY22, increased cash burn contributed to the challenging financial landscape.
Key Financial Metrics:
Consolidated Net Loss Surge: The consolidated net loss for FY23 surged 2.4 times, reaching INR 158.25 Cr compared to INR 65.72 Cr in FY22.
Operating Revenue Growth: Operating revenue nearly doubled to INR 224.04 Cr in FY23, marking a substantial increase from INR 116.73 Cr in FY22.
Revenue Breakdown: The majority of revenue, INR 177.95 Cr in FY23, was generated from subscription services, indicating the significance of SaaS offerings.
Total Revenue Growth: Total revenue showed robust growth, reaching INR 249.5 Cr during FY23, compared to INR 121.21 Cr in the previous fiscal year.
Expense Escalation: Total expenses surged 2.2 times to INR 407.22 Cr in FY23 from INR 186.93 Cr in FY22.
Employee Benefit Expenses: Employee benefit expenses constituted a significant portion of total expenditure, escalating 2.1 times to INR 222.31 Cr in FY23.
Cloud Hosting and Technology Costs: Cloud hosting expenses increased 2.3 times to INR 48.21 Cr, and software and technology costs quadrupled to INR 16.66 Cr in FY23.
Advertising and Promotional Expenses: Advertising and promotional expenses saw a substantial growth of 4.3 times, reaching INR 21.66 Cr in FY23.
Investor Support: Despite the financial challenges, Darwinbox continued to attract support from investors, including Microsoft and State Bank of India. The startup entered the unicorn club in early 2022 after securing $72 Mn in funding led by Technology Crossover Ventures (TCV).
Future Plans: Darwinbox remains ambitious about its future plans, with co-founder Chennamaneni expressing the startup’s intention to achieve profitability in its India operations by 2023. The company aims for a public listing by 2025.
As Darwinbox navigates financial challenges amid its growth trajectory, the HRtech unicorn remains optimistic about its long-term goals. The financial analysis underscores the complexities of scaling operations, particularly in the competitive landscape of HRtech. The ongoing support from key investors indicates confidence in Darwinbox’s potential to overcome short-term setbacks and establish itself as a major player in the HRtech sector.