Fintech firm Instamojo, which reported a loss of Rs 1.1 crore last year, has reportedly become profitable, recording a profit of Rs 8.26 crore in the financial year 2023.
Despite shutting down its core payment business, the firm maintained a steady operational revenue of Rs 46 crore, YourStory reported, citing the company's annual filings. The revenue from operations was almost identical to the Rs 46.6 crore reported in FY22.
The transition from payment solutions to D2C tech
Over the past two to three years, Instamojo repositioned itself from a fintech startup to a Direct-to-Consumer (D2C) technology platform. This shift involved providing digital tools to small and medium businesses (SMBs) and D2C businesses for setting up online stores. Despite this pivot, payment solutions, including online gateways, continue to be offered to its merchant clients.
What about the expense?
The company's profitability in FY23 can be attributed to significant reductions in expenses, which dropped from Rs 48 crore to Rs 38.12 crore in FY23. Apart from this, Employee benefit expenses were reduced by Rs 4 crore, and other expenses, including marketing and legal fees, also decreased.
Several Indian startups, which have reported losses for the past few years, are now focusing on reducing their cash burn to achieve profitability.
Future of Instamojo's payment business
Following the Reserve Bank of India's decision to return its application for a license, Instamojo has adapted its payment business model. The company has partnered with licensed payment aggregators to offer payment solutions.
According to Akash Gehani, Chief Operating Officer of Instamojo, the company is in talks with various partners, and its gateway business remains fully functional.
Founded in 2019 by Sampad Swain, Aditya Sengupta, Akash Gehani, and Harshad Sharma, Instagram so far has raised over $8 million in funding from investors, including Mastercard, BASE, Times Internet, Kalaari Capital, and BEENEXT, among others.
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