IPO-bound ecommerce furniture startup Pepperfry posted a marginal decline in its net loss in the financial year ended March 31, 2023. The Mumbai-based startup’s net loss narrowed 3% to INR 187.6 Cr in the financial year 2022-23 (FY23) from INR 194 Cr in the previous fiscal year.

Founded in January 2012 by late Ambareesh Murty and Ashish Shah, Pepperfry sells a wide range of furniture and other home products through its website, ecommerce marketplaces, and offline stores. 

The startup’s operating revenue rose 10% to INR 272.3 Cr during the year under review as against INR 246.9 Cr in the previous fiscal year.  

Pepperfry primarily generates revenue from the commission it earns by connecting customers with the merchants on its website. The startup earned INR 241 Cr from this in FY23, an increase of 7.4% from INR 224.4 Cr in the previous fiscal year.

Including other income, Pepperfry’s total income stood at INR 290.3 Cr, a jump of 10% from INR 264.3 Cr in FY22

Where Did Pepperfry Spent?

The startup’s overall expenses increased 3% to INR 474 Cr from INR 458 Cr in FY22.

Procurement Cost: Being an ecommerce marketplace, the startup’s biggest expense was the procurement cost. It spent INR 282 Cr on procurement in FY23, an increase of 36% from INR 207.4 Cr in the previous fiscal year.

Employee Benefit Expenses: Pepperfry’s employee benefit expenses rose 6% to INR 86 Cr in FY23 from INR 80.9 Cr in the previous fiscal year. Employee costs include salaries, provident fund payments, gratuity, among others. The small increase indicates that the startup’s headcount didn’t see a big rise this year. 

Advertising Expenses: While ecommerce marketplaces are known for spending big on advertising, Pepperfry managed to bring down its marketing expenses in FY23. The startup spent INR 106 Cr on advertising in FY23, a decline of 18% from INR 129.8 Cr in the previous year.

Pepperfry raised $23 Mn from its existing investors, including institutional investors and family offices, in September this year. It has raised around $300 Mn across multiple rounds till date and counts the likes of Pidilite, Goldman Sachs, Bertelsmann India, and Innoven among its backers.

Unfortunately, its cofounder CEO Murthy passed away in August this year. Shah later took the CEO role.

The startup, which competes against the likes of Urban Ladder, has been preparing for its initial public offering (IPO) since early 2022. It even converted itself into a public entity in May last year. However, like many other startups, it postponed its plans to go public considering the slowdown in the equity markets last year.