The Tiger Global-backed company reported a 14% year-on-year increase in operating revenue to Rs 3,275 crore for FY24, according to its financial documents sourced from Tofler.
In FY23, Spinny had changed the way it recognised its revenue – calculating cash-and-carry sales in its revenue accounting instead of only commissions earned on sales through the marketplace. That had resulted in its topline jumping to Rs 3,262 crore in FY23, compared to Rs 109 crore in FY22.
This means Spinny’s operating revenue now reflects the value at which it sells its vehicles. The cost at which it purchased its stock cars is reflected under its expenses.
“The loss reduction (in FY24) mainly came from gross margin expansion, multiple efficiencies from increase in tech-product intervention across departments, and rationalisation of buffer capacity…those are largely the reasons why loss has come down,” Spinny founder and chief executive Niraj Singh told ET.
Spinny, which competes with the likes of SoftBank-backed Cars24, Peak XV Partners-backed CarDekho and listed firm CarTrade, had last raised $283 million in December 2021 led by Abu Dhabi-based ADQ in a round that valued the firm at $1.7 billion.
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ET had reported last year that new-age used-car platforms increased their efforts on generating revenue from ancillary sources such as auto financing, insurance and classifieds, after witnessing a palpable slowdown in growth.According to a credit rating note by Icra, CarDekho’s parent firm Girnar Software Pvt Ltd saw a marginal 1.5% year-on-year decline in its operating revenue for FY24 at Rs 2,297 crore. Its net loss reduced significantly to Rs 186 crore in FY24 from Rs 517 crore in FY23. Girnar Software has not yet filed its financial statements with the Registrar of Companies, and these numbers are provisional.
Cost rationalisation, growth trajectory
During FY24, Spinny rationalised operations by merging its budget and luxury car offerings – Truebil and Spinny Max – into its main platform – a move that resulted in the company laying off 300 employees.
This was also evident from Spinny’s employee benefit expenses, which came in flat at Rs 392 crore in FY24.
The company also massively cut back on its marketing costs – spending Rs 141 crore in FY24, compared to Rs 328 crore in FY23.
“Earlier, because of high growth expectations, the buffer capacity we held was high…now that has been rationalised and we carry capacity in a controlled manner,” Singh said.
He added that the company’s topline is expected to grow 25-30% in FY25, and that the long-term fundamentals for the used-car segment remained strong. Singh also said that the company’s ancillary services such as car financing and servicing, which have so far remained a negligible portion of Spinny’s topline, will increasingly start contributing to its revenue.
“There was a massive pent-up demand after Covid, and new car availability was low…which is why used-car sales saw an uptick. But the market has rationalised now, and it will grow in a fair range now,” Singh said. “In terms of volumes, we saw 40% growth in October compared to the same month last year,” he added.