Mensa Brands’ FY23 Loss More Than Doubles To INR 227 Cr

House of brands unicorn Mensa Brands’ consolidated net loss more than doubled to INR 227 Cr in the financial year 2022-23 (FY23) from INR 96.6 Cr in the prior fiscal year due to higher cash burn,  as per the filings of its Indian entity with the Registrar of Companies.

As a startup that owns and operates several consumer brands such as Pebble, MyFitness, Dennis Lingo, and others, Mensa Brands earns a majority of its revenue from sale of products. 

Its total operating revenue surged over 137% to INR 499.6 Cr in FY23 from INR 210.4 Cr in the previous year, with INR 386.2 Cr coming from sale of products. 

Mensa Brands also earned INR 17.4 Cr from sale of services in the reported fiscal while its other operating revenue, in the form of shared service income, stood at INR 96 Cr.

Overall, total revenue, including non-operating income, increased to INR 534.7 Cr in FY23 from INR 217.9 Cr in the year before.

Founded in 2021 by former Myntra CEO Ananth Narayanan, Mensa Brands has raised over $200 Mn in equity so far from marquee investors like Accel Partners, Prosus, and Tiger Global. Its debt investors include Alteria Capital, InnoVen Capital, and Stride Ventures. 

As per Mensa Brands’ consolidated statement filed in Singapore, its net loss surged over 300% in FY23 to $65.93 Mn (about INR 540 Cr) from $16.41 Mn (about INR 132 Cr) in the previous year. Excluding fair value changes for shares for an acquired entity, which was a one-time cost in FY23, the company’s net loss stood at $40.14 Mn (about INR 332 Cr).

On the other hand, total revenue jumped to $169.65 Mn (about INR 1,404 Cr) in FY23 from $42.80 Mn (about INR 349 Cr) in FY22. 

In a statement, Mensa Brands said, “We are very pleased with our overall operating performance. Our FY23 revenue is up almost 4X to over INR 1,200 Cr making us one of the largest DTC companies in India. Seven of our brands are now over 100 Cr ARR and many of these have grown 5-6X since Mensa taking over; 90% of the brands are profitable at the EBITDA level and we are at break-even at the corporate level.”

Zooming Into Expenses

In line with the rise in operating revenue, the Indian entity of Mensa Brands saw its total expenses jump 142% to INR 763.2 Cr during the year under review from INR 315.4 Cr in FY22.

On a unit economics basis, the unicorn spent around INR 1.5 to earn every rupee from operations.

Purchases Of Stock-in-Trade: Mensa Brands spent INR 165.1 Cr towards the purchase of its finished goods for the business, which was a sharp 120% jump from INR 74.9 Cr In FY23.

Employee Cost: The company’s employee benefit expenses surged 200% to INR 91.5 Cr in FY23 from INR 30.5 Cr a year ago.

In that, Mensa Brands spent INR 66.2 Cr towards salaries and wages, registering a 230% year-on-year (YoY) surge. The sharp rise indicates that the startup may have increased its headcount during the year under review.

It also spent INR 19.6 Cr towards employee share-based payments, which also more than doubled YoY.

Depreciation, Depletion and Amortisation Expenses: Mensa Brands spent INR 58.6 Cr in this bucket, which jumped 160% YoY.

Advertising Promotional Expenses: The startup spent INR 29.8 Cr towards advertising expenses in FY23, which jumped from only INR 9 Cr in FY22.

Miscellaneous Expenses: With a total spending of INR 239.2 Cr, miscellaneous expenses accounted for the biggest chunk of total expenses in FY23. However, the startup didn’t give a break up of these expenses. Mensa Brands had spent INR 101 Cr on miscellaneous expenses in FY22.

It is pertinent to note that Mensa Brands acquired MensXP, iDiva, and Hypp from Times Internet and also partnered with these brands’ parent entity India Lifestyle Network (ILN) in FY23. However, amid the ongoing funding winter and startups focusing on improving bottom lines, Mensa Brands laid off around 30 employees from ILN in May.

Meanwhile, expanding its footprint, Mensa Brands entered the UAE market this year. The company also raised $40 Mn in debt from EvolutionX Debt Capital in October.