In a financial report for the fiscal year 2022-23 (FY23), HRtech unicorn Darwinbox reveals a significant setback as its consolidated net loss surges 2.4X to INR 158.25 Cr from INR 65.72 Cr in the previous fiscal year. Despite a nearly doubling operating revenue, the Microsoft-backed startup grapples with higher cash burn and intensified expenses, signaling challenges in its financial landscape.
Rising Operating Revenue, Escalating Losses
Darwinbox’s operating revenue almost doubled, reaching INR 224.04 Cr in FY23 compared to INR 116.73 Cr in FY22. However, this substantial revenue growth couldn’t prevent the consolidated net loss from soaring, reflecting increased cash burn and operational challenges.
Darwinbox’s Core Offerings and Revenue Streams
Founded in 2015, Darwinbox operates as a cloud-based HRtech startup, offering a comprehensive suite of HR services that include recruitment, onboarding, core transactions (leaves, attendance, directory), payroll, travel, and people analytics. As a Software as a Service (SaaS) provider, the majority of Darwinbox’s revenue, INR 177.95 Cr in FY23, comes from subscription services.
Expense Breakdown and Growth
The startup’s total expenses surged 2.2X to INR 407.22 Cr in FY23 from INR 186.93 Cr in the previous fiscal year. Key areas contributing to the expense growth include:
- Employee Costs: Employee benefit expenses skyrocketed 2.1X to INR 222.31 Cr from INR 103.59 Cr in FY22, indicating a potential increase in headcount.
- Cloud Hosting Expenses: Darwinbox’s cloud hosting expenses jumped 2.3X to INR 48.21 Cr in FY23, highlighting the significance of technology infrastructure.
- Software and Technology Cost: Quadrupling to INR 16.66 Cr from INR 4.14 Cr in the previous fiscal year, emphasizing the startup’s investment in technology.
- Advertising Expenses: Advertising and promotional expenses grew 4.3X to INR 21.66 Cr in FY23 from INR 5.05 Cr in the previous year, indicating increased efforts in brand promotion.
Investor Backing and Future Plans
Darwinbox entered the unicorn club in early 2022, backed by investors like Peak XV Partners and Lightspeed India. Despite the financial challenges, the startup secured funding from Microsoft and State Bank of India in FY23. Darwinbox’s co-founder, Rohit Chennamaneni, expressed plans for a public listing by 2025, with a focus on making Indian operations profitable by 2023.
Clientele and Market Presence
Darwinbox currently claims to serve over 800 organizations across more than 115 countries, with notable clients such as Adani, MatchMove, and Mahindra.
