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Business News/ Companies / News/  ‘Rupeek’s focus is to achieve profitability’

‘Rupeek’s focus is to achieve profitability’

In an interview, Sumit Maniyar, the founder and chief executive of Rupeek, said the slowdown in the market and funding environment, had moderated its growth expectation

Sumit Maniyar, the founder and chief executive of RupeekPremium
Sumit Maniyar, the founder and chief executive of Rupeek

MUMBAI : Sequioa-backed gold loan startup Rupeek expects to break even this fiscal year after significantly scaling up its operation in the first six years.

In an interview, Sumit Maniyar, the founder and chief executive of Rupeek, said the slowdown in the market and funding environment, had moderated its growth expectation. The firm has been focussing on reducing its burn rate over the past year and considering fewer tie-ups with banks in its endeavour to turn profitable, he added.

“Focus is razor sharp. Turn profitable. Make your business more resilient in terms of risks, compliance, and lender partnership. We are closer to profitability. August onwards we will be EBITDA (earnings before interest, taxes, depreciation and amortization) neutral."

The Bengaluru-based startup is focussing on acquiring gold loan customers online and take its services to their doorsteps. It reported a loss of 364 crore in FY22 even as its revenue saw a 50% jump.

Since its inception in 2015, the firm has disbursed loans worth 20,000 crore. Maniyar said with the change in market conditions and overall liquidity crunch, it is looking to build the business over the long term.

From partnering 15 lenders, setting up three or four distribution channels and offering 5-7 products, it is now focussed on expanding its services with just five banks to offer its financial products.

“Initial focus was to scale up and gain larger volume and value before achieving profitability. We were initially pursuing ambitious projects and using that to get profitable. But things changed as we have to reciprocate to market conditions. The entire mindset is to achieve profitability and continue compounding on a profitable base. Markets were such that if you were not chasing growth, competition was going to get capital. Markets are saner now, and you can build the business in the right way without worrying about capital. Overall, we are building it from a sustainable standpoint."

During fiscal year 2023, Rupeek has seen its cost jump by 97% on a year-on-year basis to 451 crore owing to the global macroeconomic condition which saw funding slowdown for startups.

“Cost has been brought under substantially to build high quality business. That patch is over. Unfortunately, it had to be done. The strategy was to do parallel processing in a resource abundant environment. But now the mindset is to do in a sequential order but in profitable way,’ he said.

With the backing of investment partners such as Bertelsmann, Peak XV (formerly Sequoia Capital India), GGV and Accel Partners, Maniyar explains that Rupeek is currently well-capitalised. It had raised capital from both external and internal investors over the last one year.

“Need for consumer capital is not there. Burn has reduced substantially by more than 75%. Some buffer is required. Need to burn further cash to be neutralised by August," he added.

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Published: 19 Jun 2023, 10:37 PM IST
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