Digital banking startup Freo narrowed its net loss by 64.54% to INR 14.16 Cr in the financial year 2023-24 (FY24), from INR 39.94 Cr in the previous year, thanks to improvement in its EBITDA margin.
Operating revenue increased by 11% to INR 111.46 Cr in the financial year ended March 2024, compared to INR 99.80 Cr in the previous year.
The startup reported an EBITDA loss of INR 12.3 Cr during the year under review, compared to an EBITDA loss of INR 36.6 Cr in FY23. EBITDA improved by 26 percentage points to -11% in FY24, compared to -37% last year.
Founded by Kunal Varma, Anuj Kacker and Bala Parthasarathy in 2015, Freo previously operated under the name MoneyTap. Later, MoneyTap
became part of Freo, a digital bank. platform. It offers credit under the name MoneyTap.
The neobanking startup offers a range of products such as personal credit lines, cards, loans, bill payments, credit on UPI, digital savings accounts, deposits, insurance solutions and services financial.
In October last year, the Bangalore-based startup makes a foray into the insurance field after receiving a corporate agent license from the Insurance Regulatory and Development Authority of India (IRDAI).
As a digital banking company, Freo primarily earns its revenue from the sale of services. This includes revenue generated from technology development services, credit processing services, credit line establishment services, portfolio services, commissions, strategic marketing services, service fees, among others. others.
Revenue from this segment grew by almost 9% to INR 99.54 Cr during the year under review, compared to INR 91.60 Cr in the previous year.
Other operating income jumped 45% to INR 11.92 Cr in FY24 from INR 8.20 Cr in the previous FY.
Where did Freo spend in FY24?
The digital banking startup managed to reduce its expenses by 10.28% to INR 125.58 Cr from INR 139.97 Cr in FY23.
Benefits expenses: Expenditure under this head decreased by 15.14% to INR 39.56 Cr in FY24 as compared to INR 46.62 Cr in the previous FY.
Information technology expenses: Freo spent INR 4.30 Cr on this in FY24, up 18.78% from last year’s INR 3.62 Cr.
Miscellaneous expenses: The startup reported a 6.38% decline in its miscellaneous expenses to INR 73.26 Cr during the year under review, compared to INR 78.26 Cr in the previous year. This is the largest item of expenditure for Freo during the year under review. However, he did not provide details of these expenses.
Freo is part of a growing list of startups looking to return home to India as it seeks to capitalize on India’s booming economy, access to a wider investor pool and better initial public offering (IPO) prospects, among others.
In February 2024, Freo raised a undisclosed debt amount of the Small Industries Development Bank of India (SIDBI).