Today, the growth of startups is not dependent on profits. A lot of VCs are backing startups that have little to show for profits but have the potential to corner the market.

As long as companies continue to grow and their valuations keep increasing, VCs keep pumping money to keep the engine running – while making money in the process.

Let’s take a look at India’s top 10 loss making startups:

00:00 Introduction
01:53 #10 Urban Company
02:58 #9 CRED
04:03 #8 Delhivery
05:15 #7 Udaan
06:29 #6 Ola Cabs
07:41 #5 Swiggy
08:49 #4 Zomato
10:00 #3 Dream11
11:08 #2 OYO
12:18 #1 Paytm

#10 Urban Company: Founded by Abhiraj Singh Bhal, Varun Khaitan and Raghav Chandra in 2014, Urban Company is India’s largest homes services marketplace. The company has a network of more than 35,000 home service professionals. They have also expanded beyond India to countries UAE, Australia, Singapore and Saudi Arabia. Because of their rapid global expansion, Urban Company’s losses have almost doubled from $10 million in FY19 to $18 million in FY20.

#9 CRED: Founded by Kunal Shah in 2018, CRED is a fintech startup that rewards its users for paying their credit card bills on time. The company is trying to fundamentally change the behaviour of its consumers in order to build a community of high trust individuals. This is why CRED had to spend a lot to get customers on their platform through expensive ads – leading to a minuscule operating revenue of $71,200, while expense stood at $51.8 million.

#8 Delhivery: Founded in 2011, logistics startup Delhivery is planning to go public in the coming months – which is why they have managed to cut down their losses significantly but it still remains considerably higher. Their losses rose to a high of $256 million in FY19 before coming down to just $38 million in FY20.

#7 Udaan: Founded by three former Flipkart employees in 2016, Udaan is a B2B marketplace for retailers to buy products directly from the manufacturers. Focusing on rapid growth and building their all-India logistics – Udaan ended up raking up some pretty huge losses. Their losses rose by 3X from $112 million in FY19 to $333 million in FY20.

#6 Ola Cabs: Founded by Bhavish Aggarwal and Ankit Bhati in 2010, Ola Cabs has not only established its ride-hailing business in India but has also expanded internationally to countries like Australia, New Zealand and the UK. The company has been continuously improving its unit economics while also cutting down on losses in hopes of going public. They managed to cut down their loss from $436 million to $373 million between FY18 to FY19.

#5 Swiggy: Founded in 2014, Indian food delivery unicorn Swiggy has long been engaged in a battle with its rival Zomato by offering huge discounts and cashbacks to acquire new customers. That combined with poor unit economics of the food delivery business, Swiggy’s losses have continued to pile on. They ended the FY20 with a revenue of $368 million but a loss of $499 million.

#4 Zomato: Founded in 2008, Swiggy’s food delivery rival Zomato which has recently filed for an IPO is yet to achieve profitability either. The company claims to have achieved positive unit economics – which is a step towards profitability but according to their IPO filing, the company is expected to continue to be making losses for a while. In the first three-quarters of FY21, Zomato has already lost $93 million.

#3 Dream11: Founded in 2008, Dream11 is India’s only gaming startup to turn unicorn and it is also a leader in the country’s fantasy gaming segment. They’ve had to spend a lot on the advertisement to make fantasy gaming popular among the masses – at a time when it was being looked at as gambling. As a result of which, Dream11’s losses for FY19 stood at $19 million.

#2 OYO: Founded by Ritesh Agarwal in 2013, Oyo Rooms is India’s hospitality unicorn that had expanded rapidly to international destinations before shrinking operations due to the pandemic. Their unpreceded rate of expansion demanded investment before they could make any money. This is why Oyo Rooms’ losses grew 6X from just $50 million in FY18 to $336 million in FY19.

#1 Paytm: India’s most valuable fintech startup Paytm has been in the headlines for its heavy losses but they are now gearing up to file for an IPO – in fact, it could be India’s largest IPO ever. While Paytm has managed to cut down its losses significantly by 42% from $389 million in FY20 to just $232 million, they are still a long way from profitability.

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