Gupshup India Achieves INR 1,619 Crore Income and INR 49 Crore Profit in FY23
Three points you will get to know in this article:
- Gupshup’s Indian operations saw impressive revenue growth of 43% in FY23, reaching Rs 1,619 crore.
- The company’s prudent financial management led to a 22.5% boost in profits, showcasing resilience and commitment to growth.
- Despite a valuation adjustment, Gupshup’s global presence and strategic acquisitions position it well for continued success and innovation.
Gupshup, the conversational messaging platform, stands out among unicorns for its distinctive trait—it has consistently been in the black over the past few fiscal years, in stark contrast to the majority of its counterparts grappling with substantial losses. Impressively, the Indian arm of Gupshup not only weathered the storm but thrived, showcasing growth in both revenue and profit during FY23. According to the annual financial statements obtained from the ROC, Gupshup’s revenue from operations in India surged by 43%, reaching Rs 1,619 crore by the end of the fiscal year in March 2023, up from Rs 1,132 crore in FY22.
It’s important to highlight that the earnings mentioned were generated by Gupshup’s local branch, excluding any income from international markets. Gupshup, supported by Tiger Global, operates globally with a strong presence in foreign markets, so the actual financial figures might show variations.
Revenue Sources and Global Network
This innovative company provides businesses with an API, allowing them to seamlessly connect with their customers on popular platforms such as WhatsApp, Twitter, Facebook, and Slack. Gupshup’s revenue primarily comes from mobile messaging services, text message advertising, and software development fees. Additionally, they have earned Rs 6 crore in other income (non-operational) during FY23, stemming from the interest on current investments.
The organization asserts a monthly delivery surpassing 10 billion messages and boasts a network of over 45,000 brand partnerships spanning 60 countries. With a notable footprint in Latin America, Southeast Asia, the Middle East, Eastern Europe, Africa, and the United States, the company has established a global presence.
Expense Breakdown and Cost Management
Turning to the financial aspect, a significant portion, amounting to 69% of the total expenses, is attributed to the payments made to business solution providers. This expenditure exhibited a notable increase of 32.4%, climbing from Rs 814 crore in FY22 to Rs 1078 crore in FY23.
Gupshup India saw a remarkable surge in its investment towards employee benefits, soaring by an impressive 92% in the preceding fiscal year. Various factors, including telephone charges, legal professional fees, advertising and promotional expenses, along with other overheads, collectively propelled the overall expenditure to Rs 1,562 crore in FY23, a substantial increase from Rs 1,084 crore in the previous fiscal period.
Financial Health and Investment Landscape
Thanks to a strategic approach to scale and cost management optimization, Gupshup not only navigated this financial landscape efficiently but also achieved a noteworthy 22.5% boost in profits, reaching Rs 49 crore in FY23 compared to Rs 40 crore in FY22. Reflecting on its financial health, Gupshup’s Return on Capital Employed (ROCE) stood at 17%, and its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin reached an impressive 50%.
Breaking it down to a unit level, Gupshup expended Rs 0.96 to earn a rupee during FY23. This prudent fiscal approach, coupled with effective management, underscores the company’s commitment to financial resilience and growth.
Market Position, Valuation, and Strategic Initiatives
Gupshup achieved unicorn status in April 2021, securing a substantial $100 million investment from Tiger Global. Further strengthening its position, the company raised an additional $240 million that year and successfully acquired Knowlarity, Active.Ai, and Onedirect. However, in July 2023, Fidelity Investments, a key supporter of Gupshup, marked down the company’s valuation to $700 million, possibly recognizing the heightened competition within the industry.
Despite Fidelity’s valuation adjustment, Gupshup remains poised for growth. The company’s in-depth understanding of its markets, clients, and their evolving needs sets it apart. This is evident in its impressive performance metrics. While Gupshup may encounter increased competition, the expansive market offers numerous opportunities. Notably, efforts like the introduction of a UPI-based payment system for feature phones underscore the company’s adaptability and proactive approach, indicating a readiness to navigate challenges. The visionaries behind Gupshup, led by Beerud Sheth, are well-positioned to capitalize on the company’s resilience and commitment to innovation.
Gupshup, a thriving conversational messaging platform, has demonstrated robust financial performance, with its Indian arm achieving remarkable revenue and profit growth in FY23. The company’s innovative API facilitates seamless customer engagement across popular platforms, contributing to its substantial revenue from mobile messaging services, advertising, and software development. Despite a significant increase in expenses, Gupshup’s strategic cost management led to a notable profit surge. Additionally, its unicorn status and strategic acquisitions underscore its potential for continued growth, positioning it well to navigate the evolving industry landscape under the visionary leadership of Beerud Sheth.
