Rare Rabbit Posts INR 32 Cr Profit In FY23, Sales Cross INR 350 Cr Mark

Bengaluru-based fashion brand House of Rare, which operates popular apparel brand Rare Rabbit, has almost doubled its net profit in the financial year ending on March 31, 2023.

The bootstrapped startup has reported a profit of INR 32.2 Cr FY23, a 84% YoY increase from INR 17.5 Cr, on the back of rise in sales.

In FY23, the startup’s revenue from operations jumped by 77% YoY to INR 376 Cr, from INR 212.5 Cr. 

The apparel startup primarily earns revenue by selling clothes and footwear through its retail stores, a native ecommerce store and online channels such as marketplaces. 

Including other income, House of Rare’s total income stood at INR 381 Cr, a 74% higher than INR 219 Cr. 

Rare Rabbit’s Major Expenses 

The startup total expenditure stood at INR 338.7 Cr in the financial year 2022-23 (FY23), a 72% higher than INR 196.6 Cr. 

Cost of Materials Consumed: Being an apparel brand, the startup’s biggest expenditure was the cost for procurement of raw materials. In FY23, the startup had spent INR 136 Cr, 77% higher than INR 76.9 Cr it spent the last fiscal year.

Advertisement Expenses: The startup spent almost 20% of its total expenses on advertising. In FY23, ad costs rose to INR 63.3 Cr, 51% higher than INR 42 Cr. 

Employee Benefit Expenses: In FY23, the startup spent INR 39.5 Cr towards employee expenses, 54% higher than the previous fiscal year. This expense head comprises employee salaries, PF contribution, gratuity, ESOP cost, among other employee costs. An increase in this cost indicates an increase in employee headcount. 

In FY23, the startup’s EBITDA stood at INR 56.2 Cr, which translates into 14.9% EBITDA margin, a marginal improvement from 14.4% reported last year. 

Founded in 2015 by Manish Poddar and Akshika Poddar, The House of Rare operates Rare Rabbit, women’s fashion wear brand Rareism, everyday wear brand Articale.

Incidentally, the startup is reportedly in talks to raise its maiden funding of around $60 Mn. The funding round is likely to be led by A91 Partners, and will also see participation from the family offices of Manyavar owner Ravi Modi and Nikhil Kamath. 

The funding round is expected to be a primarily capital infusion, and will also see a secondary sale from the husband-wife founder duo. The funding round is likely to value the startup to around $266 Mn. 

The startup is reported to have posted a revenue of INR 600 Cr in FY24. However, the FY24 figures could not be verified since the startup has not yet filed its audited financial statements. 

House Of Rare closely competes with the likes of Bombay Shirt Company, Snitch, Damensch, The Souled Store, among other new-age D2C fashion brands.