Alpha Wave-backed B2C ecommerce startup DealShare’s net loss crossed the INR 500 Crore mark in the financial year ending March 31, 2023. Experiencing a 14% rise, the startup’s loss amounted to INR 502.7 Crore in the financial year 2022-23 (FY23), up from INR 440.7 Crore in the preceding fiscal year.
Established in 2018 by Sourjyendu Medda, Vineet Rao, Sankar Bora, and Rajat Shikhar, DealShare operates as a marketplace for the purchase of groceries and vegetables. However, the startup has been facing a financial crunch for some time now.
The company’s operating revenue witnessed a marginal 5% growth, reaching INR 1,963.5 Cr in FY23, up from INR 1,863.5 Cr in the previous fiscal year.
The startup generates its main source of revenue by selling grocery products to customers, obtaining them from wholesalers.
Including other income, DealShare’s total revenue for the year under review grew to INR 2,054.9 Cr from INR 1,899.5 Cr in FY22.
DealShare’s Investment Focus: Procurement and Expenses
In the fiscal year 2022-23, DealShare experienced a surge in total expenditure, surpassing the growth in its operating revenue. The overall expenditure rose by 9%, reaching INR 2,577.6 Crore, compared to INR 2,340.3 Crore in the preceding fiscal year.
As a marketplace, the startup primarily invested in acquiring finished goods, with its procurement expenses increasing by 6% to INR 2,079.8 Cr in FY23 compared to INR 1,969.8 Cr in the preceding fiscal year.
Employee expenses witnessed an 85% increase, reaching INR 219.2 Cr in the reviewed year. In FY22, the startup allocated INR 118.3 Cr towards employee benefit expenses. Notably, the company downsized around 100 employees, constituting 6% of its workforce, last year. Subsequently, in September of the last year, an additional 130 employees were laid off, attributed to a change in the business model.
In FY23, DealShare allocated INR 106.6 Cr for logistics and transportation costs, mirroring its expenditure in FY22.
Employee Layoffs and Operational Changes at DealShare
DealShare has been making headlines for unfavorable reasons over the past year or so, ranging from layoffs to the departure of cofounders. Despite having secured $390 Mn in funding to date and achieving a valuation of $2.7 Bn, the startup is currently grappling with a capital shortage, a consequence of the prevailing funding challenges and its significant cash burn.
Consequently, the company has let go of more than 220 employees in two separate rounds of layoffs. Additionally, last year, the startup ceased its operations in Maharashtra and certain areas of Hyderabad.
The unicorn also decided to close down its B2B business, focusing solely on the B2C vertical.
Amid these developments, it also saw three of its co-founders – Sourjyendu Medda, Vineet Rao, and Sankar Bora – step down from their individual roles. Now, Rajat Shikhar is the only co-founder associated with DealShare.
Continue Exploring: B2B ecommerce unicorn Udaan sees drastic 50% valuation drop to $1.8 Billion in down round
