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Chingari's Financial Evolution: Crossing Rs 100 Cr Revenue in FY23 with a 70% Loss Reduction

Chingari, the short-video-making app, experienced a significant financial transformation in the fiscal year ending March 2023, crossing the milestone of Rs 100 crore in revenue while reducing its losses by 70%. Previously a TikTok clone, Chingari transitioned into a paid, private live streaming platform connecting users and creators at the onset of the fiscal year. The impact of this pivot on its financials will be observed in the forthcoming FY24 reports.


During FY23, Chingari reported a remarkable 2.3X increase in revenue from operations, reaching Rs 113 crore. Notably, the company's losses saw a drastic decline of 70% compared to the previous fiscal year.


Founded in November 2018, Chingari relied solely on the sale of services for revenue until FY23. In August 2022, the company ventured into the crypto space with the launch of its $GARI token and announced plans for a debut on six global exchange platforms. Additionally, it partnered with Bollywood actor Salman Khan to introduce an NFT marketplace and reward platform.


While Chingari did not disclose a revenue breakdown for FY23, it appears that advertising and crypto activities were significant contributors to its revenue stream.


On the expenditure side, application development constituted 32% of the overall costs, increasing by 16.3% to Rs 50 crore in FY23. Employee benefits costs surged by 3.8X to Rs 46 crore during the same period. Despite these increases, Chingari managed to significantly reduce its advertising and promotional costs to Rs 29 crore in FY23 from Rs 113 crore in FY22.


The company's prudent management of advertising expenses contributed to a notable reduction in losses, which plummeted to Rs 42 crore in FY23 from Rs 139 crore in FY22. Meanwhile, its EBITDA margin improved to -36.3%, indicating progress towards profitability.


Chingari, which has raised a total of Rs 360 crore across funding rounds, reported total outstanding losses of Rs 223 crore as of March 2023. With only Rs 24 crore in total current assets at the end of FY23, the company faces challenges in balancing its financials.


The transition to a desi version of OnlyFans presents uncertainties regarding Chingari's future trajectory and its insights into India's online audience. The FY24 figures will provide a clearer picture of the impact of the Crypto winter and the sustainability of its new business model.


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