Wealth management startup Dezerv, backed by Premji Invest, reported a significant revenue growth of 160% in the fiscal year ending March 2024, reaching Rs 26.25 crore, up from Rs 10.20 crore in FY23. However, the firm also saw a considerable rise in its losses, which surged by 95% to Rs 74.53 crore in the same period, marking a continued financial challenge despite its positive revenue growth.
The company, which raised Rs 265 crore in a Series B funding round in July 2024, derives income from its portfolio management services (PMS), targeting high-net-worth individuals (HNIs) with offerings that include expert financial advice, direct bonds, and angel investment opportunities in startups. Dezerv’s total income, including Rs 8 lakh in non-operating revenue, amounted to Rs 26.33 crore for FY24.
One of the largest contributors to Dezerv’s expenses was its employee benefits, which saw a significant rise of 113.6% to Rs 63.34 crore, making up 63% of its total expenses for the year. Marketing costs also increased substantially, rising more than three times to Rs 18.48 crore. Legal and miscellaneous expenses stood at Rs 4.13 crore and Rs 14.89 crore, respectively. As a result, total expenses for the year climbed 108.3% to Rs 100.84 crore from Rs 48.42 crore in FY23.
Despite a strong push in advertising and marketing, Dezerv’s losses deepened, reflecting a 95.1% increase from the previous year. The company’s return on capital employed (ROCE) and EBITDA margin were reported at -64.9% and -267.45%, respectively, indicating financial strain.
On a per-unit basis, Dezerv spent Rs 3.84 to generate each rupee of operating revenue, though it reported a healthy cash balance of Rs 100 crore and current assets worth Rs 122 crore. Interestingly, the company reported Rs 1,009 crore in revenue for FY23, but this was later adjusted to Rs 10.22 crore following a change in accounting policies, leading to some discrepancies in financial reports. Dezerv has not yet clarified these adjustments.
To date, Dezerv has raised about $60 million in total funding. Premji Invest holds 9.84% of the company’s shares, with Elevation Capital, Matrix, and Accel owning 15.28%, 15.28%, and 11.46%, respectively.
Despite the growing economy and low financial literacy even among the affluent, Dezerv’s approach of focusing exclusively on the professional segment has led to a high cost structure, primarily driven by its heavy marketing expenditure. The company faces the challenge of standing out in a competitive market, risking being overshadowed by other players unless it can expand beyond its current market focus.