Startups, they say, are the businesses of the future. This is the reason why they can be seen driving the most disruptive trends within their respective industries. It is also why they bag sizeable investments from financiers and experience two-digit (and even three-digit) growth rates YoY. However, a lot of us don’t assess what this “growth” actually implies: whether it’s in a vanity metric (like GMV, as pioneered by e-commerce behemoths) or a meaningful one (like EBITDA). By the turn of 2019, it became clear that smart investors are looking for businesses that have profitability at their core. This has come as a rude shock for most startups that kept pushing the break even point beyond the horizon.
In the midst of this, it is fair to acknowledge those startups that have built profitable companies while scaling up to significant levels, for these are the ones that are truly disruptive. Let us have a look at some of the startups that have stopped relying on external funding and are focused on building real businesses instead:
Let us have a look at some of the startups that are actually making money by building on their prudent business models:
Grofers: In the hyperlocal segment, Grofers is leaving no stone unturned as a true disruptor. The platform has eliminated the hassles of physical grocery shopping with its touch-of-a-button experience. Grofers now has its business spanning across 27 cities in India and registered a growth of 2.4x during FY2019. Its operations are profitable in Delhi now and breakeven achieved in Kolkata. More cities are expected to turn profitable this year for Grofers.
Gamezop: Gamezop: Do you download videos as individual files and play them on a media player? Or do you stream them instantly on YouTube instead? Now think about what you do with games: you install each game individually from the app store on your phone. This is what Gamezop is revolutionizing entirely by making games instantly playable, without the need for installation.
On www.gamezop.com, one can play over 250 high quality games with a single-tap. To top it all, one can win actual money by participating in tournaments organised on this website. The platform currently has over 15 million Monthly Active Users. The company’s audited financials show that it booked 45% EBITDA in the last fiscal, while sources close to the Gamezop report that the company has Rs. 1.25 Cr. in monthly revenues. Will the company continue to increase presence in the India market or will it set shop outside India to diversify? A lot of discerning eyes will be on Gamezop in 2020.
Byju’s: Ending its last financial year with $188.8 million revenue and $2.6 million profit, Byju’s is yet another startup that has disrupted the edtech sector with its e-Learning solutions. The platform helps everyone from school-going children to graduate and post-graduate students to understand complex topics with an easy and comprehendible approach. Perhaps, that is why Byju’s today has 2.8 million paying subscribers as well as more than 40 million registered users. As digitization speeds up amongst our rural heartlands, the true potential of the platform remains to be seen.
InMobi: Founded in 2006 by Naveen Tewari, InMobi is an adtech startup that turned profitable as early as 2016. The platform enables businesses to launch personalized ad campaigns leveraging its effective reach to over 1.64 billion devices throughout the globe. It also empowers them to make informed marketing decisions and where to effectively spend their money. InMobi also bears the tag as the first Indian startup to become a unicorn after it successfully led a series of acquisitions and partnerships. The US is the InMobi’s primary market when it comes to revenues, followed close on heels by China. However, as smartphone penetration amplifies across the country, India is where its next wave of growth will come from.
Zomato: Profitability is something largely unheard of in the FoodTech sector. The competition is cutthroat, sizeable on-ground resources are required, and the national market is far from saturation yet. However, Zomato has successfully driven a financially prudent business model and today serves about 25 million customers in 500 cities in India. In the coming 5 years, its business is further expected to grow by around 10 times. Here, it needs to be noted that Zomato’s operations are still not profitable, however, the platform can turn profitable anytime soon in the near future.
