Quikr: A Journey from Unicorn to Profitability

Quikr, once regarded as one of India’s early unicorns, has witnessed a continual decline in revenue, leading it to operate at a significantly smaller scale. The Bengaluru-based platform reported a 12% decrease in operating revenue but achieved profitability for the first time, recording a profit-to-revenue ratio of 1:22 for the fiscal year ending March 2024. But is this the beginning of a turnaround? One may think otherwise.

Financial Overview of Quikr

Quikr’s revenue from operations fell by 12%, landing at Rs 45 crore for FY24 compared to Rs 51 crore in FY23, as per its consolidated financial statement from the Registrar of Companies.

Lead referral fees and advertising were the primary sources of its revenue, contributing 86% of total income. Lead referral fees alone brought in Rs 22 crore, while advertising services contributed Rs 17 crore. Commissions and other services added Rs 3 crore each to the revenue stream.

Breakdown of Income

The company also accumulated an extra Rs 11 crore from provision write-backs and financial asset gains, bringing total income for FY24 to Rs 56 crore.

Expense Management

On the expense front, employee benefits expenses formed the largest segment, accounting for 69% of total costs. This expense category was reduced by 10% to Rs 37 crore. Notably, advertising expenditures tripled, rising to Rs 3 crore from Rs 1 crore in FY23, despite being a smaller part of overall costs.

Depreciation and amortisation expenses saw a sharp decline from Rs 5 crore in FY23 to just Rs 15 lakh in FY24, greatly decreasing non-cash expenses. Overall, Quikr successfully cut total costs by 11.5%, reducing them to Rs 54 crore from Rs 61 crore in the prior year.

Profitability Gains

Thanks to its effective cost management and additional revenue streams, Quikr achieved a profit of Rs 2 crore, in stark contrast to an Rs 8 crore loss in FY23. Its ROCE and EBITDA margins improved to 1.69% and 5.36%, respectively. For FY24, Quikr spent Rs 1.20 to generate one rupee of operating revenue.

Current Financial Position

As of March 2024, Quikr reported current assets totalling Rs 20 crore, including Rs 2 crore in cash and bank balances. This reflects an 80% decline from Rs 11 crore in FY23, raising suspicions regarding liquidity and cash flow management or possible alterations in capital deployment strategies.

Funding History

According to various startup data sources, Quikr has secured a total funding of $380 million to date, an astounding 52 times its FY24 revenue. Key investors include Warburg Pincus, Kinnevik, Tiger Global, and Matrix Partners India (now Z47).

Future Prospects

Considering that most investors have written off their stakes in Quikr, the pressing question remains if the company can sustain itself as a viable business. This may only be possible if the current team is distinct from the original groups that navigated through vast financial resources without significant results. The historical burnout has evidently affected Quikr’s capacity to adapt to new circumstances, a challenge it has consistently faced. After doubling down with even greater financial commitments following setbacks, the necessity now is to leverage the collective experience garnered over a decade to monetise, albeit on a smaller scale, and to ensure profitability. It appears the firm is nearing this goal, which could be positive news for its employees. However, whether present reserves will suffice for a sustained recovery remains uncertain, profit margins notwithstanding.