Last updated on 17th February, 2018.
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 Rs 8,771 crore in the financial year ending March 2017. Yet, the company is valued at nearly Rs 75,000 crore. According to Moneycontrol, that is more than the market capitalization of all the top retail stocks listed on NSE. So, FlipKart tops the chart in the list of loss making startups in India.
According to The Economic Times, Snapdeal lost Rs 5,142 crore during FY 17. 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 before tax of Rs 2,313.66 crore in the 2015-2016 financial year. That is losing almost Rs 6 crore a day. And, the overall loss is a three-fold increase compared to a year-earlier loss of only Rs 796 crore.
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 900 crore in the financial year 2016 -2017 (up from Rs 1,548 crore in FY 16), according to the company’s filings with the Registrar of Companies (RoC) .
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 332 crore during FY 2017, according to the research firm Tofler.
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 Hike Messenger
Hike Messenger is the brainchild of Airtel Chief Sunil Mittal’s son, Kavin Bharti Mittal, and was valued at $1.4 billion last year. The company witnessed a loss of Rs 217.36 crore in the 2015-2016 financial year, which puts it at the last 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 534 crore in the 2015-2016 financial year.
- Oyo Rooms: Rs 364 crore in the 2016-2017 financial year.
- Big Basket: Rs 191 crore in the FY 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.