Tata Digital widened its losses by 5.7x in FY22 on the back of rising expenses, in the first year of operations of its super app Tata Neu.
It reported a loss of Rs 3,051.9 crore in FY22, compared to a loss of Rs 536.8 crore in FY21, according to regulatory filings shared by private intelligence platform Tofler.
Tata Digital, in April 2021, launched its Tata Neu, aiming to offer its digital services and offerings under a single app. To accelerate its game plan of building an ecosystem of digital consumer businesses, the company had acquired stakes in popular consumer grown startups including e-grocer BigBasket, e-pharmacy 1mg, and health and fitness platform CureFit.
Tata Digital did not comment on VCCircle's queries.
In FY22, the firm reported a three-fold jump in revenue from operations to Rs 15,979.7 crore from Rs 5,315.3 crore in FY21.
In the last year, about 96% of this came from the sale of products, 2.8% from activities such as advertisement services, display income, and membership fee among others. The rest came from the sale of services.
After nine months of its launch, the company has grown its Neu members, its loyalty program, to about $40-$50 million users.
The growth comes on the back of rising expenses, which also grew more than threefold to Rs 19,316.3 crore in FY22, compared to Rs 6,069.4 crore in the previous year.
During the year, Tata Digital spent a major chunk on purchasing finished goods to sell on its application, which was about Rs 14,518.5 crore, over three times than Rs 4,509 crore in FY21. It spent another Rs 1,419.3 crore in employee benefit expenses, about four times compared to Rs 345.8 crore in FY21.
The next big expense was advertising and promotion. In its first year of launching the app, the company spent Rs 581 crore in FY22 in advertising as it gathered its users. This expense was about nine times of Rs 62.8 crore in FY21. About Rs 558.5 crore went as transportation distribution expense in FY22, compared to Rs 28.9 crore in FY21.
Tata Digital competes with the likes of Amazon and Reliance with its foray into the consumer internet category.