Spinny’s FY22 Loss Surges 4.4X to INR 220 Cr As Advertising Expenses Jump Over 580%

Tiger Global-backed used car marketplace Spinny’s loss grew over 300% year-on-year (YoY) to INR 490 Cr in the financial year 2021-22 (FY22). The startup’s loss jumped 4.4X from INR 110 Cr in FY21 due to a sharp rise in its advertising expenses. 

Total revenue surged 4.5X to INR 180 Cr from INR 39.7 Cr in FY21. Similarly, the startup’s expenses climbed to INR 670 Cr in FY22, a 346% increase from INR 150 Cr in FY21. 

Spinny’s revenue from operations rose 332% to INR 109.4 Cr in FY22, the year it turned unicorn. Operating revenue stood at INR 25.2 Cr in FY21.

Spinny earned revenue of INR 90.2 Cr from sale of services in FY22 as against INR 19.1 Cr under ‘other operating revenues’ in FY21. Its other income stood at INR 70.5 Cr. Other income usually comprises interest earned on investments. 

In November last year, the startup had claimed that its gross merchandise value (GMV) grew to  $300 Mn in 2021, a 5X jump and was expected to touch $1 Bn in 2022. 

The startup operates across the entire value chain of pre-owned cars, embedding technology. 

The increase in Spinny’s expenses was led by a sharp jump in its advertising and employee benefit expenses. The startup spent INR 265.9 Cr on employee benefit expenses in FY22, a 255% jump from INR 74.7 Cr in FY21. 

Employee benefit expenses usually comprise employee wages, PF contributions, gratuity, and other employee welfare benefits. A rise in employee benefit expenses is also an indication of increasing headcount. 

Earlier this month, Spinny launched an employee stock ownership plan (ESOP). Under the newly introduced ESOP plan, all employees of Spinny will receive stock options. 

Spinny’s promotional and advertising expenses surged 582% to INR 220 Cr in FY22 from INR 32.2 Cr in the previous fiscal. Spinny spending almost 32% of its total expenses on advertising, or 2X more than its sales, contradicts what founder Niraj Singh told a national daily in November after raising the funds at a unicorn valuation. 

“The good thing about our growth is that it has happened without any major advertising and marketing spends. Almost 40 per cent of buyers come to our platform due to word of mouth rather than any kind of reference bonus. We have always had the lowest customer acquisition cost among our peers and plan to stay that way,” he said. 

Last year, cricket legend Sachin Tendulkar partnered with Spinny as a strategic investor and a lead brand ambassador. Spinny further roped in badminton star PV Sindhu for campaigns. 

Founded in 2015 by Singh, Mohit Gupta and Ramanshu Mahaur, Spinny currently has 36 car hubs and is operational in 22 cities, including Delhi, Gurugram, Noida, Bangalore, Mumbai, Pune, Hyderabad, Chennai, Kolkata, Ahmedabad, Lucknow, Jaipur, Chandigarh, and Indore. 

The startup has raised over $550 Mn across multiple rounds so far and counts General Catalysts, Abu Dhabi Growth Fund, Accel Partners, and Avenir Growth Capital among its investors. 

The startup competes against the likes of Cars24, CarTrade, and Droom. While Cars24 laid off over 600 employees earlier this year and has seen multiple high level exits owing to its business restructuring, Droom has backtracked on its public listing plans due to market volatility. 

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