Re-commerce marketplace Cashify continues to miss its target of turning profitable. The company’s net loss widened to `147.9 crore in FY23, compared to 99.3 crore a year ago, despite a strong revenue growth, according to data sourced from Private Circle.
This would be the second instance of the company missing its target of turning profitable. It had first targeted to post a profit by mid-FY22 and then by FY23. In December last year, co-founder and CEO Mandeep Manocha had said losses will narrow in FY23 which would help in turning profitable by FY24-end.
Despite failing to turn profitable, one of Cashify’s investors, Bessemer Venture Partners, is confident of its investment in the company and its ability to continue leading the refurbished electronics market in India.
“The business has been growing and the company is well on its path to get to profitability in the next calendar year,” said Anant Vidur Puri, partner at the venture capital firm. He added that the company may choose to invest in opportunities that come along and make a good case for investment.
Cashify continues to struggle with increasing costs, particularly employee-related expenses, cost of buying used electronics and other expenses such as logistics, tech infrastructure and advertising costs.
In FY23, for instance, its employee benefit expenses rose to 117.3 crore from 75.4 crore in the preceding year. Similarly, its cost of buying used electronics for resale rose to 711 crore in FY23 from 486.7 crore a year ago.
The demand for refurbished electronics in India has fueled Cashify’s topline, helping it expand its offline store network and kiosks around the country. Last year, the company announced plans to expand to over 100 cities in India and increase its store count to 250.
As per Counterpoint Research, India leads the global refurbished smartphone market with a 19% year-on-year growth in 2022. This is in contrast to the new smartphone sales data, which indicates prolonged downturn with slow recovery.