Decoding Astrotalk’s Fortunes: How The Astrology Startup Hit 4X Profit Growth 

Decoding Astrotalk’s Fortunes: How The Astrology Startup Hit 4X Profit Growth 

SUMMARY

Astrotalk, which first achieved profitability in FY20, believes that it is poised to become the ‘Uber’ for astrology and is eyeing international expansion

In FY23, Astrotalk reported revenue of INR 282 Cr with a profit of INR 27 Cr, nearly 4X higher than the previous year

Given the company’s target of reaching INR 2,000 Cr in revenue before an IPO in 2025-26, curbing marketing spends will be a significant challenge

No one can see the future, yet millions of Indians turn to fortune tellers, astrologers and seers to get a glimpse of their days to come. It’s no wonder then that astrology marketplace Astrotalk has emerged as an outlier in the sea of loss-making growth stage startups.As per Astrotalk’s audited FY23 financials, accessed by Inc42, the company has reported revenue of INR 282 Cr with a profit of INR 27 Cr in the last fiscal year. That’s 2X-plus growth on the revenue front, as well as a remarkable near 4X surge in profits. And even though the company’s net profit fell in FY22 in comparison to FY21, the FY23 profit is higher than FY21.“We chose to go with a curated marketplace where the ‘inventory’ side of the marketplace grows slowly and steadily. There’s a vetting process before astrologers are on-boarded and we typically have a 70% selection rate for astrologers, with four to five rounds of interviews,” cofounder Jain told Inc42.“We took a conscious call to not charge the astrologers even from a point of view of training because it creates a lot of mistrust when we want to grow our brand and also asking for money to be part of the model. It’s like getting a job somewhere but you have to pay for it,” Jain added.While Astrotalk cofounder Jain did not specify the size of the upcoming round, he did confirm that the startup is in talks to raise significant funding, which along with its cash flow will hold it in good stead for the expansion on the cards.The blended customer acquisition cost for each customer is in the $6-$9 range. From a contribution margin perspective, this cost is recovered in six to eight months.“Right now, about a sixth of our marketing spend is on the international markets, 1/6th of the revenue also comes from these geographies, primarily from non-resident Indians in the US, the UK, Canada, Australia and other English-speaking countries.”Given the company’s target of reaching INR 2,000 Cr in revenue before an IPO in 2025-26, curbing marketing spends will be a significant challenge, particularly as it looks to expand internationally, acquire non-Indian users and increase the revenue share from international customers.

Of course, it would be folly to think of this as a business based around espousing superstitions. In many cases, this is akin to counselling or one-on-one guidance rather than completely relying on the stars, according to founder and CEO Puneet Gupta.

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