Instamojo, the fintech startup once recognized for its standalone payment gateway services, has undergone a significant transformation, evolving into a direct-to-consumer (D2C) tech platform. Despite discontinuing its primary payment operations last month due to a rejected license application by the Reserve Bank of India, the company reported a consistent operational revenue of Rs 46 crore in FY23. This shift in focus has allowed Instamojo to maintain month-on-month profitability through its new avatar as a D2C enabler for SMBs and D2C enterprises.
Consistent Operational Revenue
Instamojo’s financial report for FY23 reveals operational revenue of Rs 46.2 crore, showcasing the success of its pivot from a payment-centric model to a comprehensive D2C tech platform. This operational revenue includes Rs 7 crore from IT services and Rs 38 crore from an unspecified ‘revenue account.’ Despite discontinuing standalone payment services, Instamojo has demonstrated financial resilience in its new role.
In line with its strategic shift, Instamojo has effectively managed its total expenses, reducing them from Rs 48 crore to Rs 38.12 crore. This cost optimization is attributed to a reduction in employee benefit expenses, including salaries and provident fund, amounting to Rs 4 crore. Other expenses, encompassing marketing, managerial remuneration, and legal fees, decreased to Rs 23.14 crore from Rs 28.6 crore.
New Revenue Model
Instamojo’s transition from a payment-focused platform to a D2C tech enabler is reflected in its new revenue model. While other income witnessed a slight reduction compared to the previous financial year, the overall revenue remained consistent, showcasing the efficacy of its diversified offerings.
Despite the cessation of primary payment operations, Instamojo ensures the smooth functionality of its gateway business. The company now provides payment solutions through strategic partnerships, facilitating a seamless transition for its merchant clients’ payment accounts to licensed partners. This collaborative approach safeguards the continuity of its gateway services.
Instamojo’s strategic pivot has generated discussions about potential fresh funding, indicating the company’s commitment to growth and innovation. This funding initiative aims to facilitate exits for early investors and support Instamojo’s evolution into a prominent player in the D2C tech space Instamojo’s journey from a payment services provider to a D2C tech platform exemplifies its adaptability and resilience in the ever-evolving fintech landscape. The company’s consistent operational revenue, cost optimization measures, and commitment to providing innovative solutions position it as a noteworthy player in empowering SMBs and D2C enterprises on their digital journey. As discussions about fresh funding emerge, Instamojo appears poised for further growth and impact in the evolving tech ecosystem.