Synopsis
Bengaluru's M2P Fintech has reported a 13.4% decline in operating revenue to Rs 382 crore in FY24, compounded by a significant net loss of Rs 133.5 crore amidst rising expenses.Key Takeaways
- Operating revenue fell by 13.4% to Rs 382 crore.
- Net loss reached Rs 133.5 crore.
- Employee benefits accounted for 47.5% of total expenses.
- 76.2% drop in export income.
- Acquired Mad Street Den for $10-15 million.
New Delhi, March 5 (NationPress) The Bengaluru-based banking infrastructure startup M2P Fintech has experienced a decline in its operating revenue, which fell by 13.4 percent to Rs 382 crore, compared to Rs 441 crore in the previous fiscal year (FY23).
The company, backed by Tiger Global, generates income through various channels, including API usage fees, card issuance and management fees, platform subscriptions, banking partnerships, and cross-border forex services.
Operating in over 30 international markets, M2P Fintech faced a drastic 76.2 percent drop in export income, decreasing from Rs 19.3 crore in FY23 to Rs 4.6 crore in FY24.
The primary challenge for the startup in maintaining its growth trajectory in FY24 has been escalating expenses.
According to its financial report, employee benefits constituted the largest portion of expenses, making up 47.5 percent of total costs.
These expenses surged by 33.5 percent to Rs 251 crore, which includes a non-cash ESOP cost of Rs 36 crore.
On a positive note, the company managed to reduce spending on technology, cloud services, and co-branding by 56.4 percent, lowering these costs to Rs 160 crore.
Other operational costs, such as legal, advertising, travel, and overhead, contributed to M2P’s total expenses reaching Rs 528 crore.
The company's ROCE (Return on Capital Employed) was (-) 28.23 percent, and its EBITDA margin was (-) 22.51 percent.
M2P continued to spend Rs 1.38 for every rupee earned, highlighting persistent financial challenges.
Following a tripling of its net loss year-on-year (YoY) during FY23, the B2B fintech reported a net loss of Rs 133.5 crore, a slight increase of 0.15 percent from Rs 133.3 crore in the last fiscal year.
By the end of FY24, the fintech company had total assets of Rs 318 crore, including Rs 78 crore in cash and bank balances.
As reported, M2P Fintech has raised over $200 million in funding so far, which includes $100 million from a Series D round led by Helios Investment Partners last year. Notable investors include Beenext, Tiger Global, and Helios Partners.
Despite its financial hurdles, M2P successfully acquired the Chennai-based AI startup Mad Street Den for a sum between $10-15 million, as indicated by the report.
