In FY21, Zeta India’s revenue reached Rs 300 Cr, losses increased over 2X
- ByStartupStory | September 28, 2022
Zeta, a platform for cutting-edge financial technology, became a unicorn after a $250 million round spearheaded by SoftBank in May of last year. The company’s worth increased by more than four times in the unicorn round, from its initial fundraising round in 2019 when it was valued at about $300 million. Zeta India’s revenue increased by a factor of two during FY21, which contributed to the valuation increase.
Zeta offers banks including RBL Bank, IDFC First Bank, and Kotak Mahindra Bank among others services like credit and debit card processing, APIs made to work natively within cloud-native applications, and IT infrastructure. During FY21, operating revenue increased more than two times to Rs 297 crore from Rs 121.6 crore in FY20, according to its standalone annual financial statement filed with Registrar of Companies (RoC) recently.
It’s important to note that these figures only apply to Zeta’s Indian entity. Its parent company, which is based in Singapore, enables banks and financial institutions to introduce cutting-edge corporate and retail fintech solutions across a number of regions, particularly in Asia and Latin America.
Employee benefit costs, which made up 83.6% of the overall cost, were found to be the company’s biggest annual expense. From Rs 83 crore in FY20 to Rs 290 crore in FY21, this expense increased by 3.5X.
During FY21, costs for legal, professional, and subscriptions/memberships increased by roughly 13%, 47%, and Rs 8.05 crore and Rs 1.5 crore, respectively.Additionally, the Mumbai-based company reported Rs 2.9 crore in training and hiring costs in FY21, down 43.6% from Rs 5.14 crore in the fiscal year that ended in March 2020. In FY21, the cost of rent and utilities climbed 7.3% to Rs 7.9 crore.
During FY21, Zeta recorded an additional expense of Rs. 28.62 crore for software costs, card network and issuance fees, payment gateway costs, and other business support services.In keeping with its income, the company’s total yearly expenses increased by 142.7% to Rs 347 crore in FY21 from Rs 143 crore in FY20.
Zeta reported yearly losses of Rs 43 crore in FY21, a staggering 2X increase from Rs 20.3 crore in FY20. In the fiscal year that ended in March 2021, the company invested Rs 1.17 to generate each rupee of operating revenue.During FY21, Zeta’s EBITDA margin deteriorated by 66 BPS to -12.03%, which was likely caused by an approximately 250% increase in employee benefit costs.
Zeta’s future growth will depend on the mix it arrives at, aside from obviously acquiring new clients, as the BFSI industry is transitioning to many different revenue models for software suppliers, be they flat payments or even transaction-led payouts.
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