Last updated on 8th February, 2019.
Bootstrapped startups cannot afford to make crores of rupees of losses unless the founders have deep pockets. But, for funded startups, the scenario is different.
Billion dollar global startups like Uber have a whopping $1.46 billion (that is over Rs 9,000 crore) of net loss in the third quarter as per Reuters. Another giant, SnapChat, reported a loss of $443 million (almost Rs 3,000 crore) in the same period, according to CNN.
Well, Indian unicorns are not staying behind either. Here is a quick list of loss making startups in India that are valued at a billion dollars but are losing hundreds of crores of rupees every year (some are even losing thousands) and still going strong. Take a look.
FlipKart had a loss of over Rs. 3,200 crore for the financial year ended March 2018, according to regulatory filings for the two entities that control the Flipkart business i.e Flipkart Internet and Flipkart India. Flipkart Internet runs the online marketplace and has reported losses of about Rs. 1,100 crore. And Flipkart India which is the wholesale arm of the online retailer lost over Rs. 2000 crore.
According to The Economic Times, Snapdeal lost Rs 613 crore during FY 18. Its biggest investor, Softbank, tried selling it to Flipkart to reduce its losses, but it did not work out. FlipKart offered a buyout of $850 million, but the two founders of Snapdeal, Kunal Bahl and Rohit Bansal, opposed the deal and wanted to go solo with Snapdeal 2.0. The coming days will tell us how this all shapes up.
Uber’s arch rival in India, Ola, chalked up a consolidated loss of Rs 4,898 crore in the FY 17 according to its filings with the Registrar of Companies.
Paytm’s parent company One97 is another unicorn that has made significant losses although the revenue went up as well. The company had a loss of Rs 1,606.65 crore in FY 18, up from Rs 900 crore in the financial year 2016 -2017, according to the company’s filings with the Registrar of Companies (RoC) . The combined losses of One 97 and Paytm Mall has been Rs 3,393 crore, up from Rs 917 crore the previous year.
ShopClues is a new entrant in the billion dollar club and was founded by the MTV Dropout Pvt Ltd. fame, Sandeep Aggarwal. The company had losses of around Rs 208 crore (before tax) for the year ended March 2018, according to the regulatory filings.
However, the burn rate is far lower than its biggest rivals, Amazon and FlipKart. Is that a good news? Well, we are not sure.
#6 Oyo Rooms
Oyo is the new entrant to the billion dollar club with a valuation of whopping $5 Bn. The company reported a loss of Rs. 330.97 crore for the financial year ended March 2017. The number dipped by 33% , compared to Rs. 496.31 for the previous financial year.
#7 Hike Messenger
Hike Messenger is the brainchild of Airtel Chief Sunil Mittal’s son, Kavin Bharti Mittal. The company witnessed a loss of Rs 400 crore for the financial year ended March 2018 as per the filings submitted by the company with the registrar of companies, which puts it at the last but not the least position in the list of loss making Indian startups.
According to VCCEdge, the data research platform of News Corp VCCircle, the loss is due to the rising marketing expenses based on Hike Messenger’s filings with the Registrar of Companies.
Non-Billion Dollar Companies Making Losses
But, it is not only the unicorns that are burning cash. Other prominent startups which are on the verge of entering the billion dollar club are also making huge losses. Here is a quick list of such loss making companies in India.
- Quickr: Rs 305 crore in FY 2017.
- Big Basket: Rs 179 crore in the FY 2018.
- Grofers: Rs 268.3 crore in the 2016-2017.
Most of the companies listed here have experienced a growth in their revenue figures so they might be able to turn things around to gain profits soon like another billion dollar Indian startup, InMobi, did. But, how soon that will happen or whether it will even happen only time will tell. Till then, let us watch and wait.
So, have we missed any startups that should have been included in this list of loss making startups in India? Do you have any questions? Please feel free to leave your comments below. I would love to hear from you.