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ApnaKlub's Impressive Growth Spurs Investor Interest Despite Soaring Losses

In the dynamic landscape of B2B consumer goods startups, ApnaKlub emerged as a notable player in 2020. Its recent financial performance has caught the attention of investors, with its gross scale witnessing a remarkable surge in the fiscal year ending March 2023. Despite impressive revenue growth, ApnaKlub's journey towards profitability remains challenging, with losses soaring by 90%.


In January of the current year, ApnaKlub secured a substantial funding round of $16 million led by TrueScale Capital and ICMG Partners. The influx of capital reflects investor confidence in ApnaKlub's business model and growth trajectory. The company's gross revenue skyrocketed to Rs 278 crore in FY23 from Rs 47 crore in FY22, as per its financial disclosures sourced from the Registrar of Companies (RoC).

Established with the vision to connect retailers, kirana stores, and FMCG brands through its wholesale partners, ApnaKlub has primarily relied on the sale of products as its main revenue stream. The company's product portfolio is diverse, with personal care products leading the sales charts, followed by beverages, home care, and processed foods. Additionally, non-operating income from long-term investments contributed Rs 3 crore to its revenue in FY23.


However, with rapid scale comes increased operational expenses. The cost of procurement of goods constituted a significant portion of ApnaKlub's expenditure, representing 82% of the overall costs. This cost surged to Rs 275 crore in FY23 from Rs 47 crore in FY22, mirroring the company's growth trajectory. Other operational expenses, including employee benefits, rent, advertising, freight, legal, and overheads, further escalated ApnaKlub's total expenditure to Rs 332 crore in FY23.


Despite its robust revenue growth, ApnaKlub faced mounting losses in pursuit of expansion. Losses swelled to Rs 56 crore in FY23, marking a 4.6X increase from the previous fiscal year. The company's return on capital employed (ROCE) and EBITDA margins stood at -50% and -17.4%, respectively. On a unit level, ApnaKlub spent Rs 1.19 to earn a rupee in FY23.


While ApnaKlub aims to achieve breakeven at a turnover exceeding Rs 1000 crore, the higher margins associated with personal care products offer a glimmer of hope for accelerated profitability. However, navigating the fiercely competitive marketplace for personal care products presents its own set of challenges.


Despite the uphill battle towards profitability, ApnaKlub's ability to secure substantial funding indicates a unique value proposition that has resonated with investors. As the company continues its journey, its strategies and market positioning will be closely monitored to ascertain its trajectory in the competitive B2B consumer goods landscape.


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