Neobanking Unicorn OPEN Spent INR 297 Cr To Clock INR 30 Cr Revenue In FY23

Neobanking unicorn OPEN’s net loss declined 3% to INR 242.2 Cr in the financial year 2022-23 (FY23) from INR 249.3 Cr in the previous fiscal year.

The Bengaluru-based fintech startup’s operating revenue grew 1.2X to INR 29.9 Cr during the year under review from INR 24.1 Cr in FY22. 

Including other income, total revenue grew 31.7% to INR 53.1 Cr from INR 40.3 Cr in the previous fiscal year.

However, it is pertinent to note that OPEN’s FY22 revenue and loss numbers saw changes as the startup transitioned to Indian Accounting Standard (IND AS) during the year under review.

“Despite withdrawing a few revenue experiments to focus on scalability and profitability, the company navigated the transition to IND Accounting Standard with a revenue growth, which previously adjusted the reported FY22 revenue of INR 41 Cr to INR 24 Cr. Concurrently, losses increased from INR 168 Cr to INR 249 Cr for the same period under the new standards,” OPEN cofounder and CFO Deena Jacob told Inc42.

On a comparable basis, the startup’s loss saw a slight reduction while revenue increased, she added.

“The current fiscal year marks the beginning of focussed revenue efforts post-product development phase for the category creator that we were, with a monthly ARR gain of INR 10 Cr and a robust pipeline for enterprise revenue,” Jacob said.

Founded in 2017 by Jacob, Anish Achuthan, Ajeesh Achuthan, and Mabel Chacko, OPEN offers business banking, payments and expense management solutions to small and medium businesses (SMBs) across the country. It has three major products – Open Flo, Open Settl and Open Capital.

Where Did OPEN Spend?

The startup reported a total expenditure of INR 296.5 Cr, an increase of 2% from INR 289.6 Cr in the previous financial year. 

Employee Benefit Expenses: The biggest expenditure was employee costs, which rose 33% to INR 149.2 Cr in FY23 from INR 112.2 Cr in the previous fiscal year. Employee benefit expenditure included employee salaries, PF contributions, gratuity, and other ESOP expenses.

Advertising Promotional Expenses: OPEN’s advertising expenditure increased 11% to INR 57.6 Cr during the year under review from INR 52 Cr in FY22. 

IT Expenses: Information technology (IT) expenses increased 94% to INR 28.5 Cr from INR 14.7 Cr in FY22.

The startup’s EBITDA stood at – INR 210.9 Cr in FY23 as against – INR 227.3 Cr in the previous fiscal year. On an unit economics basis, OPEN spent INR 9.9 to earn every rupee from operations in FY23. 

OPEN currently claims to be helping over 40 lakh SMEs and process over $30 Bn in annualised transactions. 

In December last year, the startup received the final approval from Reserve Bank of India (RBI) for its application for payment aggregator licence. 

OPEN entered the celebrated unicorn club in May 2022 after raising $50 Mn from existing investor IIFL. The startup has raised a total funding of $190 Mn till date and counts Temasek, 3one4 Capital, SBI Investment, and Tiger Global among its backers. 

It competes against the likes of Oxyzo, Yubi, and Navi.

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