MakeO, the parent company of Toothsi and skincare brand Skinnsi, achieved more than a twofold growth in its operational scale in FY23. Notably, the company also managed to limit its losses, which increased by around 20% during the previous fiscal year. However, the operating income has yet to catch up with the losses.
According to MakeO’s consolidated financial statements filed with the Registrar of Companies, its revenue from operations surged by 2.15 times to Rs 168 crore in the fiscal year ending in March 2023, compared to Rs 78 crore in FY22.
Founded in 2018 by Arpi Mehta Shah, Pravin Shetty, Manjul Jain, and Anirudh Kal, MakeO initially started as an aligner brand called Toothsi. Later, it integrated its flagship brands, including Skinnsi. Through these two brands, the company offers dental, skin, and hair treatment solutions.
The revenue breakdown reveals that 69% of the total operating revenue came from the sale of tooth aligners, which increased by 75.8% to Rs 116 crore in FY23. The remaining revenue was generated from Skinsi services, which encompass facial treatments, anti-aging solutions, acne reduction therapies, and other skincare treatments.
Employee benefits constituted the largest portion of MakeO’s expenses, representing 32.1% of the overall expenditure. This cost category grew by 76.4% to Rs 127 crore in FY23, including Rs 21 crore allocated to ESOP costs.
Consultant fees, covering scanning and therapist charges, grew by 15.4% to Rs 60 crore in FY23. MakeO’s total expenditure, including procurement, payment gateway fees, marketing expenses, rent, legal/professional fees, and other overheads, increased by 50.2% to Rs 395 crore in FY23.
Despite experiencing a two-fold increase in scale and maintaining controlled expenditure, MakeO’s losses rose by 19.6% to Rs 220 crore in FY23. Its ROCE and EBITDA margin stood at -135% and -115.4%, respectively. On a unit level, the company spent Rs 2.35 to earn one rupee in FY23.
MakeO has secured over $90 million in funding across various rounds, including its latest fundraising round of $16 million led by 360 One Asset. According to data from TheKredible, Eight Road Ventures holds the largest stake in the company, followed by Think Investments.
While the control over losses presents a positive aspect, it also indicates the challenge posed by high fixed costs that are not easily reducible. This suggests the need for substantial improvement in revenue generation for MakeO, particularly in a highly competitive market environment, especially for Skinnsi. Therefore, MakeO still faces significant challenges despite its improving financial performance.
