B2B Manufacturing Startup Groyyo Faces Declining Revenue and Rising Losses in FY24

Tiger Global-backed B2B manufacturing and automation startup Groyyo has reported a 14.4% revenue decline for the current fiscal year. It ought to be noted that they had impressive 19X year-on-year growth in FY23. The company's losses increased by 9% during the same period, raising concerns about its growth trajectory.

According to consolidated annual financial statements filed with the Registrar of Companies, Groyyo's gross revenue dropped to Rs 421 crore in FY24 from Rs 492 crore in FY23.

Founded in July 2021 by Subin Mitra, Pratik Tiwari, and Ridam Upadhyay, the Delhi-based company operates as a supply chain enablement platform that digitalizes manufacturing processes for small and medium businesses while connecting them with national and international clients.

Product sales remained Groyyo's primary revenue stream, supplemented by commissions and subscription fees. As revenue declined, the cost of procuring goods—which constitutes 78.65% of overall expenditure—decreased by 13.5% to Rs 409 crore in FY24. However, employee benefit expenses surged by 81.5% to Rs 49 crore during the same period.

Legal fees, advertising costs, asset write-offs, travel expenses, and other overheads brought the company's total costs to Rs 520 crore in FY24, compared to Rs 578 crore in FY23.

The financial downturn pushed Groyyo's losses up by 8.8% to Rs 74 crore in FY24 from Rs 68 crore in FY23. The company spent Rs 1.24 on a unit level to earn a single rupee. Key performance indicators worsened, with return on capital employed (ROCE) falling to -46.15% and EBITDA margin dropping to -13.45%. The company reported total current assets of Rs 256 crore by the end of FY24, including Rs 99 crore in cash and bank balances.

Groyyo has raised over $50 million in combined debt and equity financing, including a $40 million Series A round led by Tiger Global. According to startup intelligence platform TheKredible, Alpha Wave currently holds the most significant external stake, followed by Tiger Global.

The company's financial challenges reflect broader issues facing B2B manufacturing startups in India's competitive SME landscape. Like competitors like OfBusiness and Zetwerk, Groyyo faces the challenging task of selling successfully and proving ongoing value to small enterprise owners with limited bandwidth for multiple service providers.

The declining financials may impact Groyyo's fundraising strategy, potentially forcing faster equity dilution than planned. The company's most recent fundraising in 2024 was a debt round, possibly indicating reluctance from equity investors given the worsening financial performance.

As digital manufacturing transformation and supply chain automation continue to attract attention in India's manufacturing sector, industry observers will watch closely how Groyyo navigates these challenges and charts a sustainable growth path in the competitive B2B manufacturing technology market.