Smallcase, a wealth management startup backed by Amazon, has reported stagnant growth in the fiscal year ending March 2023. However, its losses surged by 40%, reaching Rs 133 crore, primarily driven by a 70% increase in employee costs during FY23. According to the consolidated financial statements filed with the Registrar of Companies (RoC), Smallcase’s revenue from operations witnessed a modest uptick of 6.9%, reaching Rs 31 crore in FY23 from Rs 29 crore in FY22.
Platform fees levied by the company from its users contributed 39% to the overall revenue, experiencing a 50% hike to Rs 12 crore in FY23. The remaining revenue streams were derived from subscriptions (such as Tickertape Screener), transactions, and ancillary services. Employee benefits constituted the largest portion of the company’s expenditure, accounting for 47% of the total cost. This expense surged by 69.4% to Rs 83 crore in FY23 from Rs 49 crore in FY22. Meanwhile, advertising costs remained steady at Rs 66 crore during the previous fiscal year.
The amalgamation of technology costs, legal-professional fees, and other overheads propelled Smallcase’s overall expenditure by 34.35% to Rs 176 crore in FY23 from Rs 131 crore in FY22. For a detailed expense breakdown, refer to TheKredible. It’s important to note that the expense of net loss on fair value changes of shares subject to buyback has been excluded from both FY23 and FY22. The stagnant revenue growth coupled with increased costs led to a 40% surge in losses, totaling Rs 133 crore in FY23 compared to Rs 95 crore in FY22. The company’s ROCE and EBITDA margin stood at -76% and -300%, respectively. On a unit level, it spent Rs 5.69 to earn a rupee in FY23.
To date, Smallcase has raised $70 million across funding rounds, including a $40 million Series C raise in August 2021. According to TheKredible, PeakXV holds the largest external stake in Smallcase with a 17.67% share, followed by Faering Capital and Blume Ventures. Collectively, the company’s co-founders Vasanth Kamath, Anugrah Shrivastava, and Rohan Guta command a 19.5% stake in the company.
