Apna Mart, a hyperlocal grocery platform focused on Bharat, achieved an impressive eight-fold increase in its revenue during the fiscal year ending in March 2023. However, this growth was driven by aggressive investments in promotions, workforce expansion, and employee benefits.
According to the company’s financial statement filed with the Registrar of Companies, Apna Mart’s revenue from operations soared by 770% to Rs 32.2 crore in FY23, compared to Rs 3.7 crore in FY22.
Founded in 2021 by Chetan Garg and Abhishek Singh, Apna Mart operates as a franchise-based offline grocery and FMCG chain, also offering online ordering services in cities like Jamshedpur, Ranchi, Raipur, Dhanbad, and Asansol. Positioned as a counterpart to D Mart for smaller cities, the platform has gained traction in its target markets.
The largest component of expenses for Apna Mart was the cost of materials, constituting 58.6% of total expenses. This cost surged by 809.9% to Rs 31.6 crore in FY23 from Rs 3.47 crore in FY22. Additionally, employee benefit expenses, including ESOP costs, soared to Rs 9 crore during the year.
Expanding manpower charges, marketing expenses, legal fees, and other operating costs pushed the company’s total expenditure to Rs 53.9 crore in FY23, compared to Rs 4 crore in FY22.
As a result of escalating expenses, Apna Mart incurred a loss of Rs 21.8 crore in FY23, in contrast to a profit of Rs 8 lakh in FY22. The company experienced heavy cash burn, with operating cash outflows worsening to Rs 23.4 crore and net cash flows standing at Rs 1.8 crore.
Apna Mart’s EBITDA margin and ROCE were reported at -66.37% and -449.17%, respectively, indicating significant financial challenges. On a unit level, the company spent Rs 1.67 to earn a rupee of operating revenue during FY23.
The company was in discussions to secure funding of around $15-20 million from investors such as Accel and Sequoia (now Peak XV Partners), as reported by Entrackr in April 2023.
As per TheKredible, Apna Mart has raised over $14 million from investors including Accel Partners, Peak XV Partners, Disruptors Capital, Sparrow Capital, and 2 am Ventures, valuing the firm at Rs 397 crore or $48 million.
With a valuation of Rs 397 crore and revenue of Rs 32 crore from operations, Apna Mart’s valuation-to-revenue ratio stands at 12.4 times.
The company’s co-founders, Abhishek Singh and Chetan Garg, each hold a 24.76% stake in the company. Accel Partners is the largest external stakeholder, followed by Peak XV Partners.
Operating mostly in the East and Central regions of India, Apna Mart faces significant challenges ahead, particularly in maintaining margins and navigating the competitive landscape. The founders understand the heightened scrutiny in these markets, given past retail ventures’ failures. They may focus on leveraging local brands and ensuring product quality to overcome these challenges. However, the road ahead remains challenging, and the company’s strategies will be closely observed by industry observers.
