Dailyhunt's Parent Company Has Reported a Loss of Rs 2,500 Cr and a Revenue of Rs 965 Cr for the FY22

Dailyhunt Latest Startup News

VerSe Innovation, which owns vernacular news aggregator Dailyhunt and short video entertainment app Josh, continues to lose money, with its losses more than tripling to Rs 2,500 crore in FY22.

Meanwhile, Dailyhunt operating revenue grew by 45% to Rs 965 cr during the same period, according to its annual financial statements with the Registrar of Companies (RoC). The group's entire revenue comes from online advertising and subscription services through its mobile apps and website. A total sum of Rs 19 crore was also made by the company from bank deposits and liabilities which it wrote off during the fiscal year. 

The statements didn't provide any revenue breakdown across Josh and DailyHunt. But a Dailyhunt spokesperson told Entrackr that "100% of VerSe's revenue is from advertising on Dailyhunt, and that ad revenue grew 1.5x year-over-year.

VerSe raised $450 million during FY22, at a valuation of $3 billion, and invested heavily in marketing and creating an ecosystem to enable a creator economy for its app. The company raised an additional $805 million at a $5 billion valuation in April (FY23).

Business promotion expenses were the largest cost, more than doubling to Rs 2,693 crore in FY22 from Rs 1,281 crore in FY21. This cost is 2.8X of the company's operating revenue in FY22.

Employee benefits expense was the second-largest cost for VerSe Innovation, growing by 3.8X to Rs 731 crore in FY22.  It also included the cost of Rs 375 crore on the employee stock option (ESOP) that was settled in cash.

Legal and professional expenses, as well as commissions paid to agents, increased by 4X and 2.7X respectively, to Rs 151 cr & Rs 47 cr in the last year. As a result, the company's total cost grew by 2.3 times to Rs 3,714 cr in FY22 from Rs 1,580 cr in year 2021.

With this increase in expenses, DailyHunt's parent company's losses rose by 3.17 times to Rs 2,563 cr in FY2022. Its cash outflows from operating activities also increased by 2.52 times to Rs 2,402 cr, while the company's unit economics also took a hit and spent Rs 3.85 to earn a single rupee in FY2022. "In the last 7 months Dailyhunt has grown to 8% EBITDA positive," they added.

Dailyhunt competes with Inshorts in the news aggregation and hyper-local video business, while its short video app Josh competes with MX TakaTak, ShareChat's Moj, YouTube Shorts and Instagram, among others.

Also Read: Paytm Mall Records Rs282 Cr Revenue and Rs142 Cr Loss

Josh, which launched in late 2020, has been losing money in marketing the app and also attracting top creators. 

However, VerSe's spokesperson clarified that Josh's monetization began in August and is expected to reach $100 million in annual recurring revenue during FY23. With Daily Hunt already close to Rs 1,000 crore in revenue, the company is well-placed to monetize its inventory as and when the market demands. 

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Paytm Mall Records Rs282 Cr Revenue and Rs142 Cr Loss

Paytm Latest Startup News

Paytm Mall, the e-commerce platform of Paytm, has been trying to find a sustainable model for the past two years. The Paytm Mall’s revenue from operations grew to Rs 282 crore during the fiscal year ending March 2022 from Rs 277 crore in FY21, according to its annual financial statement with the Registrar of Companies (RoC). Sales of products contributed 49.6% of the company's total operating revenue.

Revenue from Paytm Mall grew 85.3% to Rs 139.9 cr. Commission collected from merchants and sellers for providing platform services accounted for 45% of the total collection during FY22, which declined 27% to Rs 126.9 crore from the preceding fiscal year's revenue of Rs 12.7 crore. The company also booked revenue of Rs 8.6 crore during FY22 as a marketing promotion fee for providing advertising services on its platform; this income surged 47.7% from Rs 6.5 crore in FY20. In FY22, the company also collected operating revenue of around Rs 3 crore and recovered claims from courier companies; Paytm Mall also recorded non-operating income of Rs 21.6 cr from liabilities written back & Rs 80.4 cr as interest income related to bank deposits, royalty accounting adjustments, and others which drove the total revenue to Rs 384 crore during FY22.

Interestingly, only 53% of revenue in FY22 came from India with the rest from other countries. The 47% revenue Paytm Mall's revenue came from offshore markets is even odder when one considers that it doesn't have an effective presence in any overseas markets. On the expense front, royalty fees paid in exchange for services received from One97 Communications Limited (Paytm) turned out to be the largest cost element, forming 23% of its total expenditure. For those who aren't familiar with it, Paytm Mall isn't a subsidiary of One97 Communications Limited, but has been licensed to use the Paytm brand, and run on the Paytm app; however, employees don't receive benefits and advertising/promotional expenses declined 29.7% and 59%.

It costs money to run a business, and the cost of connectivity and payment gateway charges decreased by 43% in FY22 from Rs 36.9 crore in FY21 to Rs 21.1 crore. Paytm Mall's expenditure decreased by 43% to Rs 526 crore in FY22, resulting in a loss of Rs 142 crore during that period. The company also booked an exceptional item of Rs 398 crore as an impairment of goodwill taking the losses to Rs 540 crore, as per annual statements filed with the MCA portal. This could be attributed to $398 worth of impairment of goodwill booked under non-cash adjustment.

Entrackr has excluded this expense while calculating overall losses and ratios; Its costs such as connectivity and payment gateway charges have decreased by 43% in FY22 to Rs 21.1 crore from Rs 36.9 crore in FY21. The company's expenditure for Paytm Mall also decreased by 43% to Rs 526 crore during FY22. As a result, the losses of the company decreased to Rs 142 crore in FY22. The company also booked an exceptional item of Rs 398 cr as an impairment of goodwill taking its overall losses to Rs 540 cr, as per the annual statements filed to the MCA portal. Entrackr has excluded this expense while calculating the overall losses and ratios so far; however, we will be running a separate analysis on that at a later date. The EBITDA margin and ROCE improved to -27.34% and -12.88% during FY22.

Also Read: Top Benefits of Virtual Workspace

In May, the e-commerce marketplace Paytm Mall pivoted from the traditional physical goods marketplace to join the government-backed Open Network for Digital Commerce (ONDC). Meanwhile, Paytm Mall’s early and key backers Alibaba and Ant Financial took an exit from the Bengaluru-based company. While no longer a subsidiary, deep legacy relationships with former parent One97 are nowhere close to unwinding soon; as evident in the numbers. For a truly sustainable future, it needs to look at every cost harder in that respect and build further on the new opportunities it is mining now.

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