[What The Financials] InMobi Sees 13% Revenue Growth In FY20 Ahead Of Planned IPO

Bengaluru-headquartered mobile adtech unicorn InMobi witnessed its ‘best-ever year’ amid the pandemic in 2020. The company’s financials for the fiscal year ended March 31, 2020 (FY20) also offer an indication of its strong financial position. InMobi recorded a 13% year-on-year (YoY) growth in revenue, from INR 386.31 Cr in FY19 to INR 431.68 Cr in FY20. 

The company’s expenses also increased by 15%, from INR 440.53 Cr in FY19 to INR 508.34 Cr in FY20, resulting in a net loss of INR 76.66 Cr in the year, a 41% YoY growth from a loss of INR 54.21 Cr in FY19. 

Considering the scale of the company’s business, the higher losses shouldn’t be much of a worry for InMobi. The company, which was the first startup in India to achieve a unicorn level valuation in 2011, is planning a public listing for its core adtech business. Besides this, its subsidiary Glance entered the unicorn club last year. 

InMobi had seen a similar increase in losses (54% growth) in FY19, but the growth in revenue is a positive indicator for the company’s business. The company earns revenue primarily from overseas markets as INR 222 Cr came in through foreign exchange earnings. However, the contribution of Indian customers has grown as the share of foreign exchange earnings has fallen from INR 240 Cr in FY19. Overall export revenue contributes approximately 54% to the revenue, compared to 63% in the previous financial year.

For the breakup of the company’s expenses, the cost of materials consumed, which is the cost of services rendered by the company, increased by 49% to INR 167 Cr; employee benefits expense fell marginally by 4% to INR 255 Cr; depreciation, depletion and amortisation expense increased by 33% to INR 4.99 Cr; and, other expenses, which includes the company’s spending on rent, fuel, legal, advertising and other expenses, increased by 40% to INR 79.5 Cr. 

During the year, the company’s advertising and promotional expenses (included within other expenses) increased by 546% to INR 8.59 Cr in FY20. 

Founded in 2007, Bengaluru-headquartered InMobi offers a mobile marketing and advertising software development kit (SDK) that app owners and content publishers can integrate to offer measurable ads across platforms. It also operates lock screen content platform Glance as well as short video app Roposo. 

In December 2020, InMobi-owned lock screen content platform Glance received an investment of $145 Mn from Google and existing investor Mithril Capital to enter the unicorn club. The company had acquired short video platform Roposo in 2019 to bolster its vernacular video presence. Glance will use the new investment to deepen its AI capabilities across Glance and Roposo, to expand its technology team, launch services on the platform, further strengthen the brand and drive expansion in global markets.

The revenue bump for InMobi comes ahead of a planned IPO this year. InMobi founder and CEO Naveen Tewari has said the IPO in 2021 is the logical step after 2020 which was “the best ever” year for the company on the advertising side with massive growth, very large scale and huge profitability. 

Various reports also point to an increase in screen time and mobile app usage amid the pandemic, with India being among the frontrunners in terms of downloads for mobile apps across categories. “We feel pretty confident when thinking about a path to an IPO,” Tewari said last month. 

Given that the company has claimed massive growth for its core advertising business in 2020, it is expected that FY21 would see it continue the growth in revenue, where the adoption of digital platforms, apps and services saw a major growth spurt.