Retail Tech Startup Arzooo’s Sales Cross INR 1,000 Mark In FY22, Loss Widens To INR 63 Cr

SUMMARY

Arzooo’s operating revenue surged over 4X to INR 1,117.4 Cr in FY22 from INR 258.7 Cr in FY21

Despite the rise in revenue, net loss widened 3.5X to INR 62.7 Cr in FY22 due to increase in cash burn

Arzooo’s total expenditure jumped to INR 1,180.9 Cr, an increase of 326.4% from INR 276.9 Cr

B2B retail tech startup Arzooo’s operating revenue surged over 4X to INR 1,117.4 Cr in the financial year 2021-22 (FY22) from INR 258.7 Cr in FY21.

The Bengaluru-based startup offers a technology platform to help small retailers digitise their business and increase sales. It is focused on consumer electronics, including televisions, mobile phones, and small appliances, and facilitates retailers in accessing a wide variety of SKUs (stock-keeping units) across leading and emerging brands.

Arzooo earned INR 1,114.9 Cr through sale of products in FY22, an increase of 333% from INR 257.4 Cr in FY21. Apart from this, the startup generated a revenue of INR 2.5 Cr from sale of services, a 2X jump from INR 1.2 Cr in the previous financial year.

Including other income, Arzooo’s total income rose 332% to INR 1,118.2 Cr from INR 259 Cr in FY21.

Despite the rise in revenue, the startup’s loss widened 3.5X to INR 62.7 Cr in FY22 from INR 17.9 Cr in FY21 due to increase in its cash burn.

In line with the growth in revenue, total expenses jumped 4.2X to INR 1,180.9 Cr from INR 276.9 Cr in the previous year.

Purchases of stock-in-trade accounted for 93% of the total expenses in FY22. Arzooo spent INR 1,100.3 Cr for purchasing products, a significant increase from INR 257.8 Cr it had spent for the same cause in FY21.

Employee benefit expenses rose 122% to INR 28 Cr from INR 12.6 Cr in FY21. Employee benefit expenses comprises employee wages, gratuity, PF contributions, and other employee welfare benefits.

Arzooo also spent INR 4.9 Cr on advertising and promotional activities, a 10X jump from INR 48.9 Lakh in FY21.

EBITDA margin deteriorated to -5.1% in FY22 from INR -6.6% in FY21.

Founded in 2018 by former Flipkart executives Khushnud Khan and Rishi Raj Rathore, Arzooo last raised $70 Mn in its Series B round from Japan-based SBI Investment and Trifecta Leaders Fund. Celesta Capital, 3 Lines VC, and Doordash founder Tony Xu also participated in the round. The startup has raised $83.5 Mn to date.

The startup claims to be helping over 50K retail stores with over 20K products. It also provides working capital credit of up to INR 20 Lakh to the retailers.