Amazon-backed SmallCase has demonstrated significant financial strides in FY24, achieving a remarkable 2.2X growth in revenue and a 74% reduction in losses. The Bengaluru-based company, which operates a platform facilitating transactions in exchange-traded products for brokers, marked a notable rebound following flat growth in FY23.
SmallCase’s revenue from operations surged to ₹67.4 crore in FY24, compared to ₹30.6 crore in the previous fiscal year, as per its consolidated financial data sourced from the Registrar of Companies. Transaction fees from brokers constituted 85.8% of the company’s revenue, increasing 2.6X to ₹57.8 crore during this period. Meanwhile, revenue from research services and ancillary services contributed ₹5.1 crore and ₹4.5 crore, respectively. Including ₹7.6 crore from interest on deposits and investment gains, the firm’s total income reached ₹75 crore, up from ₹43 crore in FY23.
Employee benefits remained the largest expense category, accounting for 64.8% of overall spending. This cost saw a reduction of 15.7%, totaling ₹70 crore in FY24, which included a ₹2.9 crore non-cash ESOP expense. Advertising and promotion costs experienced an even steeper decline, dropping by 75.8% to ₹16 crore. Combined with expenditures on technology, legal, rent, and other overheads, SmallCase’s total expenditure stood at ₹108 crore for FY24.
A notable shift occurred in September 2023, when shareholders waived buyback rights for certain shares. This reclassification, under Ind AS, resulted in a fair value adjustment of ₹141 crore being recorded as profit and loss, with ₹1,081.78 crore moved to equity share capital and securities premium.
Despite the reduced advertising and employee expenses, SmallCase’s net losses contracted to ₹34 crore in FY24. Its ROCE and EBITDA margins improved to -23.6% and -41.3%, respectively, while its cost-to-earn ratio for each rupee of revenue improved to ₹1.60.
Having raised approximately $70 million to date, including $40 million in a Series C round led by Fearing Capital in 2021, SmallCase continues to have prominent backers like Peak XV, Fearing Capital, and Blume Ventures. However, challenges remain. The firm’s modest takings from research and ancillary services raise questions about its strategy. While cost-cutting has delivered short-term relief, the long-term impact will be clearer in FY25, especially as growth remains critical for sustainability. SmallCase now faces pivotal decisions about resource allocation and its focus areas for future growth.
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