Startups use robust investor funds to drive other income

BENGALURU : Indian technology startups earned higher non-operating income, or income derived from investments of surplus funding from investors, in FY22, buoyed by robust venture capital investments, according to a VCCircle study based on VCCedge data.

The study, which captured the financials of the 50 most-funded technology and tech-oriented ventures, showed that aggregate other income earned by these startups in the year ended 31 March 2022, jumped by 62.5% to 2,907 crore or around $400 million at the time.

In comparison, the total net sales of this set of startups more than doubled during the period.

The jump in treasury income comes after a year of pandemic-led disruption, which saw non-operating income contracting 6.7% while net sales fell 1%.

These startups posted a non-operating income of 1,789 crore in FY21, compared to 1,917 crore in FY20.

This meant that treasury income grew at a relatively slower pace compared to operating income, which captures revenue from primary business activities such as the sale of products and services.

Other income includes revenue from secondary activities such as gains from fixed deposits, sale of mutual fund units and fair value gain, income from debentures, and forex derivatives.

Indian stocks rose during FY22, with the 30-stock benchmark Sensex gaining 16% during the financial year.

The sample set comprised ventures that have raised $200 million or more across one or several rounds. It excluded firms that are now listed on the stock exchanges, such as Zomato, Paytm, Policybazaar and Delhivery. It also excludes ventures like Flipkart and Ola, among others, who are yet to file their financial statements in India.

In addition, it doesn’t count companies that are no longer technically a startup as they have been acquired and startups that have their key holding companies overseas.

Among the startups, the food delivery platform Swiggy scored the most non-operating income. The company generated 415 crore as other revenue in FY22, all of which it earned as interest on surplus cash. This is about 3.2 times what it generated during the same period the year earlier and accounted for 7% of its total income in FY22.

Fantasy sports platform Dream11 earned 224 crore as non-operating revenue. Of this, 114 core was income on current investments, 14 crore on non-current investments, and over 96 crore was other non-operating income. Overall, other income comprised about 5.5% of its total income.

While this number is in the single digits for Swiggy and Dream11, some startups earned more than 30% of their total income from such sources. These include Spinny, BharatPe and CureFit.

A few startups, including upGrad, Good Glamm, Groww, OfBusiness, Glance,, Dealshare, Spinny, Dailyhunt parent Verse, BlackBuck, BigBasket and ShareChat saw their treasury income grow faster than net sales.

As many as 17 of these 50 startups grew their other income by at least threefold.

The highest growth rate was recorded for startups like upGrad, which reported other income of 13 crore during FY22.

This was followed by Groww, OfBusiness, Glance,, all of which reported over tenfold growth in other income in FY22 compared to the year earlier.

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