The Matrix Partners-backed company’s net loss fell 72% on year to Rs 36.5 crore, as its expenses grew significantly slower than its topline, according to the company’s regulatory filings sourced from business intelligence platform Tofler.
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The growth in Zupee’s topline is in line with the surging revenues posted by online gaming firms for FY23, including Gameskraft and Mobile Premier League (MPL), prior to the impact of the goods and services tax (GST). Online real-money gaming firms were hit with a GST of 28% on full-face value this year, as against the 18% tax they paid on the platform fee that they charged users.
Zupee’s total expenses rose 66% on year to Rs 900.78 crore, primarily led by a surge in advertising and promotional expenses to Rs 703.33 crore in FY23, against Rs 380.99 crore in the previous fiscal. These expenses include marketing costs, as well as cashbacks and bonuses given to users.
Founded in 2018 by Dilsher Malhi and Siddhant Saurabh, Zupee offers games such as ludo, snakes and ladders, and even quiz games, allowing users to win real money by playing these games.
The company said it charges the players a fee, known as a platform fee, which is a “specified percentage of total gaming transaction”. It recognises the platform fees as revenue.
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On December 6, ET reported that MPL saw its net loss during FY23 narrow significantly to $37.04 million, from $194.47 million reported during the year-ended March 31, 2022. The company’s topline grew 63% on year, and expenses came down. Similarly, Bengaluru-based bootstrapped online gaming firm Gameskraft reported revenue from operations of Rs 2,662 crore in FY23, up nearly 25% from FY22. Gameskraft’s net profit also rose 14.2% on year to Rs 1,062 crore in the same period.