Darwinbox, the HRtech unicorn, experiences a 2.4X increase in its FY23 loss, soaring to INR 158 Cr

• ByStartupStory     |    December 9, 2023

Darwinbox, the HRtech unicorn backed by Microsoft, witnessed a significant surge in its consolidated net loss, escalating 2.4 times to INR 158.25 Cr in the financial year 2022-23 (FY23) compared to INR 65.72 Cr in the preceding fiscal year. Despite a nearly doubled operating revenue of INR 224.04 Cr in FY23, up from INR 116.73 Cr in FY22, the startup experienced a financial setback due to increased cash burn.

Founded in 2015 by Chaitanya Peddi, Jayant Paleti, and Rohit Chennamaneni, Darwinbox operates as a cloud-based HRtech startup, offering comprehensive solutions for companies’ HR needs, including recruitment, onboarding, core transactions, payroll, travel, and people analytics. As a Software-as-a-Service (SaaS) provider, the majority of Darwinbox’s revenue, INR 177.95 Cr in FY23, was generated from subscription services.

Despite a robust growth in total revenue to INR 249.5 Cr during the under-review period, compared to INR 121.21 Cr in FY22, the startup faced a considerable rise in expenses. Total expenses surged 2.2 times to INR 407.22 Cr in FY23 from INR 186.93 Cr in the previous fiscal year.

Employee benefit expenses constituted the largest portion of Darwinbox’s total expenditure, escalating 2.1 times to INR 222.31 Cr from INR 103.59 Cr in FY22. This substantial increase suggests a possible expansion of the startup’s workforce. Cloud hosting expenses also saw a notable uptick, increasing 2.3 times to INR 48.21 Cr in FY23 from INR 20.73 Cr in FY22. Additionally, software and technology costs quadrupled to INR 16.66 Cr from INR 4.14 Cr in the previous fiscal year.

Advertising and promotional expenses witnessed a significant growth of 4.3 times, reaching INR 21.66 Cr in FY23 from INR 5.05 Cr in the previous year. Darwinbox, having entered the unicorn club in early 2022 after securing $72 Mn in funding led by Technology Crossover Ventures (TCV), continued to attract support from investors such as Microsoft and State Bank of India in FY23.

Despite the financial challenges, Darwinbox remains ambitious about its future plans. Co-founder Chennamaneni had previously stated the startup’s intention to achieve profitability in its India operations by 2023 and aims for a public listing by 2025. Currently serving over 800 organizations across more than 115 countries, Darwinbox boasts clients including Adani, MatchMove, and Mahindra.

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