Jupiter, backed by Tiger Global, reported a notable shift in its financials. The neobank experienced a surge in operating revenue to Rs 7 crore compared to Rs 42 lakh last year. However, it faced a substantial increase in expenses, soaring to Rs 383 crore, resulting in a significant spike in net losses, escalating by 109% to Rs 327 crore in FY23.
The company’s expenditure, primarily attributed to employee benefits and technology charges, surged drastically, doubling and tripling, respectively. Additionally, Jupiter ramped up its advertising budget by 49%, amounting to Rs 74.5 crore, while sales services incurred costs of Rs 15 crore.
Despite modest earnings from its core operations, Jupiter witnessed a considerable rise in total revenue to Rs 56 crore, up from Rs 22 crore, largely bolstered by gains from investments, reaching Rs 49 crore. This positive investment income contributed to a favorable cash flow from investing activities, amounting to Rs 318 crore, compared to a substantial negative flow in the previous year.
However, the cash flow from operating activities remained negative at Rs 381 crore, while the company’s net worth declined to Rs 743 crore from Rs 1046.7 crore. Amidst these financial shifts, Jupiter made strategic moves, including securing an NBFC license from the RBI and acquiring HRtech startup SumHR, aiming to bolster its service offerings.
While neobanks like Jupiter continue to attract significant investments and partnerships, their financial sustainability remains a subject of scrutiny, especially concerning revenue streams and profitability.
