SUMMARY
The startup spent INR 51 Cr towards marketing and promotional expenses in FY22 compared to INR 9.8 Cr in FY21
Operating revenue surged 125% to INR 24.8 Cr during the period under review against INR 11 Cr in FY21
Total revenue, including various interest income, stood at INR 36.2 Cr in FY22
Investech platform Smallcase has reported a 196% year-on-year (YoY) rise in its loss to INR 76.2 Cr for the financial year 2021-22 (FY22), triggered by a significant rise in marketing and promotional expenses. The company had incurred a loss of INR 28.3 Cr in FY21.
Smallcase’s operating revenue surged 125% to INR 24.8 Cr during the period under review against INR 11 Cr in FY21.
Founded in 2016, the Bengaluru-based startup helps retail investors to invest in portfolios of broker-partner stocks and exchange-traded funds (ETFs). It also works with stockbrokers like Zerodha, HDFC Securities, AxisDirect, Edelweiss, and 5Paisa.
The company earns a majority of its operating revenue from the sale of services. In FY22, Smallcase’s transaction revenue stood at INR 9.8 Cr, up from INR 4.7 Cr in FY21. This represents the transaction fees that the startup charges from brokerages for the number of smallcases bought on their platforms.
Meanwhile, the company’s subscription revenue increased 23% year-on-year (YoY) to INR 4.2 Cr.
As per Smallcase’s regulatory filing with the Ministry of Corporate Affairs, it also divides its revenue sources into manufacturing and ancillary revenue. While manufacturing revenue represents the platform fees the company charges from publishers for manufacturing the smallcases that end users buy, its ancillary revenue sources are gateway fees, one-time integration income, and referral fees.
Smallcase’s total revenue, including various interest income, stood at INR 36.2 Cr in FY22 versus INR 13 Cr in FY21.
On the expenses front, the startup spent INR 51 Cr towards marketing and promotional expenses in FY22 versus INR 9.8 Cr in FY21.
This surge is in line with Smallcase collaborating with top media platforms like Sony Liv, Spotify, Hotstar, YouTube, major TV channels, and social influencers for distributing and promoting its first ad campaign ‘Invest in Ideas’ in January 2022.
The expenses in this bucket accounted for over 43% of Smallcase’s total expenses of INR 112.4 Cr during FY22, up 2.7X from INR 41.3 Cr in FY21.
The startup’s employee benefit expenses increased 1.8X to INR 42 Cr in FY22 from INR 22.8 Cr in FY21. Of these, INR 34.4 Cr was spent towards salaries, wages, and bonuses, which increased 75.5% YoY.
Smallcase also spent INR 4.6 Cr towards employee stock options scheme (ESOP) in FY22, which stood at INR 2.3 Cr in the year-ago period.
During the period under review, the startup’s tech cost surged 2.7X YoY to INR 10.7 Cr, while expenditure towards professional fees doubled to INR 2.8 Cr.
Founded by Vasanth Kamath, Rohan Gupta, and Anugrah Shrivastava, Smallcase has last raised $40 Mn in a Series C funding round led by Faering Capital. The startup is also backed by the likes of DSP Asset Management Firm, Sequoia, BEENEXT, Blume Ventures, Premji Invest, and several other marquee investors.
