mCaffeine, the direct-to-consumer (D2C) beauty and personal care (BPC) brand, reported a significant increase in its standalone net loss for the financial year 2022-23 (FY23). The net loss increased by 61.5%, reaching INR 91.6 Cr, compared to the previous year’s INR 56.7 Cr. This rise is primarily attributable to a sharp escalation in employee costs and advertisement expenses.
mCaffeine experienced a 51.8% surge in sales revenue, reaching INR 205.2 Cr during the period under consideration, up from INR 135.2 Cr in FY22.
Established in 2016, mCaffeine specializes in marketing caffeine-infused skincare and haircare items through its website and various online platforms, including Amazon and Nykaa. The majority of its revenue is generated from product sales. In FY23, mCaffeine’s total revenue, inclusive of other non-operating income, reached INR 210.1 Cr, reflecting a year-on-year (YoY) increase of 54.7%.
By the end of FY22, mCaffeine had announced raising over $31 million (INR 240 crore) as part of its Series C funding round, led by Paragon Partners with participation from Singularity Growth Opportunities Fund, Sharrp Ventures, and others. The startup had then stated that its primary plan was to use the funds to ramp up its R&D and expand its distribution channel.
Spending Snapshot: mCaffeine’s FY23 Breakdown
The startup’s business expansion costs were evident in its FY23 financials.
In FY23, mCaffeine’s total expenditure amounted to INR 301.7 crore, marking an impressive 57% increase from the INR 192.4 crore spent the previous year. Notably, advertising expenses accounted for a substantial 42% of the total.
The startup amplified its focus on brand promotion activities in FY23, resulting in a noteworthy 74% increase in advertising and promotional expenses. Specifically, it allocated INR 126.5 crore to this category during FY23, a substantial rise from the INR 72.7 crore spent in FY22.
It’s worth mentioning that mCaffeine roped in Indian actor Alia Bhatt in March 2022 to promote its products. Throughout FY23, the company initiated several advertising campaigns featuring Bhatt.
While employee benefit expenses made up slightly more than 13% of the startup’s overall expenses, mCaffeine’s expenditure in this category nearly doubled, reaching INR 39.6 Cr in FY23, up from INR 20 Cr in the preceding year.
In this regard, the startup allocated INR 29.5 Cr for salaries and wages, with an additional INR 8.1 Cr dedicated to share-based payments.
Procurement Rise: mCaffeine’s Goods Expenditure Climbs 50%
mCaffeine experienced a 50% year-on-year increase in expenditures for the procurement of its finished goods, reaching INR 81.3 Cr in FY23.
Conversely, the startup manufactured a surplus of goods compared to its sales during the fiscal year in question. Its inventories of finished goods, work-in-progress, and stock-in-trade reflected a negative balance of INR 10.6 Cr in FY23, contrasting with the positive INR 2.5 Cr from the previous year.
The startup’s expenditure on legal professional charges witnessed a 43.2% year-on-year decrease, reaching INR 4.2 Cr in FY23.
mCaffeine’s miscellaneous expenses, encompassing warehousing and product delivery charges, commission fees, product development costs, and other expenditures, experienced a notable 44.6% Year over Year (YoY) increase, reaching INR 51.2 Crores in FY23.
Amid its business expansion, mCaffeine’s parent company, PEP Technologies, entered into a collaboration with actor Kriti Sanon in 2023. This partnership resulted in the introduction of a premium skincare brand named Hyphen, with PEP Technologies investing INR 30 Crores and holding a majority stake in the venture.
Continue Exploring: Bollywood actor Kriti Sanon joins forces with mCaffeine to launch D2C skincare brand ‘Hyphen’
mCaffeine competes with numerous direct-to-consumer (D2C) beauty and personal care (BPC) brands in the market today, including listed D2C unicorn Mamaearth, WOW Skin Science, 82°E, Pilgrim, and others.
