The D2C startup’s net loss increased 37% to INR 18.6 Cr in FY23 from INR 13.6 Cr in FY22
While operating revenue increased to INR 57.3 Cr in FY23, the growth in expenses outpaced the rise in sales
In May last year, FMCG giant Marico acquired a 54% stake in True Elements for an undisclosed amount
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Pune-based healthy snacks brand True Elements’ net loss jumped 37% in the financial year ended March 31, 2023. The startup incurred a net loss of INR 18.6 Cr in the financial year 2022-23 (FY23), a 1.3X jump from INR 13.6 Cr in the previous fiscal year, as its expenses surged.
While the D2C startup saw an increase in the operating revenue in FY23, the rise in expenses outpaced the growth in sales.
The startup reported an operating revenue of INR 57.3 Cr during the year under review, a 25.2% increase from INR 45.8 Cr in the previous financial year. True Elements generates revenue through sale of its products through online channels and offline retail outlets.
Including other income, total revenue rose 31% to INR 60.8 Cr in FY23 from INR 46.5 Cr in the previous fiscal year.
Meanwhile, total expenditure increased over 44% to INR 84.2 Cr in FY23 from INR 58.4 Cr in the previous fiscal year. At 43%, procurement cost was the biggest contributor to the startup’s expenses. Cost of material consumed increased over 43% to INR 36.5 Cr in FY23 from INR 25.5 Cr in the previous year.
The startup spent INR 14.4 Cr on employee benefit expenses in FY23, a 36% increase from INR 10.6 Cr it spent in the previous fiscal year. Employee benefit expenditure comprises employee wages, PF contribution, gratuity, and other employee benefits. As per LinkedIn, the startup has an employee headcount of 89.
The startup saw the biggest increase in its advertising expenses, which jumped 95% to INR 15 Cr in FY23 from INR 7.7 Cr in the previous year.
On an unit economics level, True Elements spent INR 1.4 for earning every single rupee from operations during the year under review. Its EBITDA margin deteriorated to -32.3% in FY23 from -16.48% in FY22.
In May last year, FMCG giant Marico acquired a 54% stake in the startup for an undisclosed amount. The equity stake was acquired through primary infusion and secondary buyout. As a part of the deal, the leadership team of True Elements was to continue to run the brand independently.
Founded in 2013 by Puru Gupta and Sreejith Moolayil, True Elements offers packaged healthy breakfast products like oats, muesli, flakes, and granola. The startup also offers snacks.
True Elements competes with deep-pocketed international giants such as Kelloggs and Quaker, as well as startups like The Whole Truth, Slurrp Farm, and Wingreens Farms, in the Indian market.
It must be noted that Beardo, another D2C startup owned by Marico, slipped into the red in FY23 after posting a profit of INR 70 Lakh in FY22. Beardo reported a loss of INR 6.1 Cr in FY23, while its operating revenue increased a meagre 12.4% to INR 106.6 Cr.
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