Probo’s Remarkable Growth in Event-Based Trading

Probo, an event-based trading platform, has experienced significant expansion over the last three financial years. The company’s revenue escalated from Rs 2.6 crore in FY22 to an impressive Rs 86 crore in FY23, and further exceeded Rs 450 crore in FY24, representing a remarkable 5.3 times annual increase. Additionally, the net profit of the Peak XV-backed company skyrocketed 25 times year-on-year, reaching nearly Rs 100 crore in FY24.

Revenue and Financial Performance

In FY24, Probo’s revenue from operations rose dramatically to Rs 459 crore, up from Rs 86 crore in the previous fiscal year, as detailed in its consolidated financial statements sourced from the Registrar of Companies (RoC).

Founders and Business Model

Established in 2019 by Sachin Gupta and Ashish Garg, Probo facilitates trading on opinions regarding future events across various sectors, including cricket, football, finance, entertainment, and startups.

Revenue Sources

The primary revenue stream for Probo comes from platform fees charged to users for participating in contests, contributing to 97.8% of total earnings. This revenue surged 5.4 times to Rs 449 crore in the last fiscal year. Additional income from related services and other sources, such as interest from current investments, resulted in a total income of Rs 474 crore during the previous fiscal year.

Expenditure Overview

With a robust presence of YouTube influencers, advertising and promotional activities constituted 77% of Probo’s total expenditures, increasing 5.2 times to Rs 271 crore in FY24, up from Rs 52 crore in FY23. In parallel, employee benefit expenses rose by 27% to Rs 28 crore in FY24.

Operating Costs

The overall operational costs, inclusive of information technology, platform integration, legal, travel, and other administrative expenses, surged 3.5 times to Rs 351 crore in FY24. For an in-depth analysis of expenses, refer to various sources.

Profit Growth and Financial Ratios

The combination of impressive revenue growth alongside controlled expenditures allowed Probo’s net profit to soar 25 times, amounting to Rs 92 crore in FY24, compared to Rs 3.7 crore in FY23. The Peak XV-backed firm reported an expenditure of Re 0.76 to generate every rupee during the fiscal year concluding in March 2024.

Capital Metrics

Probo’s return on capital employed (ROCE) increased to 42.6%, while its EBITDA margin advanced to 26.1%. By the close of FY24, total current assets reached Rs 274 crore, with cash and bank balances recorded at Rs 169 crore.

Funding and Investments

Probo has successfully secured approximately $28 million through multiple funding rounds. As per data from a startup intelligence platform, Peak XV constitutes the largest external investor with a stake of 21.72%, followed by Elevation Capital and The Fundamentum Partnership.

Future Prospects

With a nearly limitless prediction market, Probo is well-positioned for continued growth, particularly among its core user demographic. The impressive metrics suggest that the company is on the right path. The substantial Rs 271 figure dedicated to advertising is noteworthy and would raise concerns if the company were not profitable. Given its current profit levels, there appears to be little need for additional funding as it focuses on developing a sustainable business. The firm is likely optimistic about its potential to reach Rs 1000 crore in revenue by 2026. A unicorn status could materialize even sooner if growth trends continue through FY25.