Scripbox, a wealth management platform, managed to grow its revenue at a reasonable rate over the previous fiscal year (FY24) while maintaining a regulated cash burn, allowing the Bengaluru-based company to drastically reduce its losses.
According to the consolidated financial accounts obtained from the Registrar of Companies, Scripbox's revenue from operations increased by 44.4% to Rs 84.33 crore in the fiscal year ending March 2024, up from Rs 58.4 crore in FY23.
Scripbox, founded in 2012, produces money through a diverse business plan that includes several financial services. It earns brokerage and commissions from mutual fund distribution, fixed deposits, portfolio management services (PMS), alternative investment funds (AIFs), sovereign gold bonds, and so on. Scripbox also generates income through advising services and lead generating fees based on the number of leads generated each month.
Brokerages and commissions accounted for 91.3% of the company's operating revenue, totaling Rs 77.02 crore. During FY24, investment advice costs totaled Rs 6.2 crore, with portfolio management fees totaling Rs 1.07 crore.
It also collected Rs 6.15 crore in interest and gain on financial assets, bringing the total revenue to Rs 90.5 crore by the end of fiscal year 2024.
According to Scipbox, its assets under management (AUM) total Rs 18,500 crore.
On the cost side, Scripbox spent the most (Rs 73.13 crore) on employee benefits, which decreased 38% from Rs 118.32 crore in FY23. Significantly, this figure includes Rs 25.72 crore in ESOP expenses. Subscription membership fees, advertising costs, and legal charges were recorded at Rs 4.1 crore, Rs 2.8 crore, and Rs 5.83 crore, respectively.
The company's total expenditure decreased by 25% to Rs 134.24 crore in FY24, from Rs 179.4 crore in FY23. In terms of profitability, Scripbox reduced its losses by 62% to Rs 44.7 crore in FY24, down from Rs 117.65 crore in FY23. The managed losses may be linked to cost-cutting efforts, particularly in staff costs.
Notably, the company declared unusual items of Rs 48.8 crore for the surrender or cancellation of ESOPs. This eventually portrayed the company as profitable, but due to the non-cash nature of the item, Entrackr omitted this figure from the overall losses for FY24.
The company's operating cash flows fell to Rs -11.22 crore in FY24, compared to Rs 50.37 crore in the previous fiscal year. Moving forward, the company's EBITDA margin and ROCE improved to -32.31 percent and -52.44%, respectively. Scripbox spent Rs 1.59 per rupee of operating revenue in FY24.
At the end of FY24, the firm had Rs 7.43 crore in cash and bank balances. During the time, current assets totaled Rs 37 crore, with a current ratio of 96.83 percent. According to a credible source, Scripbox has raised over USD 55 million in several rounds and is currently valued at roughly Rs 1,150 crore which is about USD 137 million. The startup is supported by Accel, LetsVenture, and DMI, among others.
Furthermore, as per a credible source, Indian wealthtech businesses including Neo, Dezerv, Centricity, Stable Money, Fisdom, InvestorAi, and Wealthy have raised more than $200 million in 13 fundraising rounds since October of last year. Scripbox was purportedly in talks to raise $25 million, although the agreement has yet to be officially disclosed.
Scripbox appears to be a perfect illustration of what might now be known as the Bengaluru syndrome, in which companies produce products with a strong use case in the rarefied confines of Bengaluru, only to suffer when the idea is extended outside the city limits. We believe Scripbox qualifies for that in a market where, aside from a few pockets of opulence, the primary focus of wealth creation remains investments in real estate, gold, and the occasional flutter in the crypto of the month. As most prospects will attest, competition for this fraction of affluent Indians with enough disposable means to feel rich about giving up the responsibility of managing their finances is fierce.
Even as companies have improved their ability to use data to target more prospects, converting them remains a significant hurdle. In a low-trust world, too much digital is not the bright alternative that vendors may believe it is. Despite its clean design and reputation, Scripbox will have to fight hard to be relevant and survive.
