When first emerged, business was only meant to be something that helped you make money. It was like a cycle in which you invested, then you make something, sell that something, gain profit and use that profit money to grow your business. But now startups are not like that anymore. Especially for startups. And now we can see a lot of Loss-Making Startups in India. This article will tell you what are Loss-Making Startups along with some genuine examples from India?
What are Loss-Making Startups?
It may sound weird. But Losses are not always bad or negative. Moreover, some startups calculate losses beforehand and are even sometimes encouraged by the financiers. That said, let’s take a look at some of the top Indian Loss-Making Startups.
Swiggy was created back in 2014. I’m pretty sure everyone must have heard of this app. This Indian food delivery app has been an amazing experience for most people. Swiggy has faced a lot of poor unit economic problems. And due to this very reason, the food delivery company has yet to gain positive unit economics. Swiggy had revenue of $368 Million in the year 2020, but they also faced a loss of $499 Million in the very same year.
• Dream 11:
The leader of the market in India’s Fantasy Gaming Segment has been popular for a long time. And the company had to spend a huge amount of money to make fantasy gaming famous among the community. Dream 11 was said to be a method of gambling. And in the year 2019, the famous fantasy gaming lost a total of $19 Million.
The famous food delivery company and the sweet rival of Swiggy have also yet to achieve profitability. Recently the company filed an IPO, according to which the company is still going to face a lot of losses. In the first 9 months of the year 2021, the company has lost a total of $93 Million.
India’s most famous app for digital money is also a loss-making startup. Paytm has been facing a huge amount of losses. And they are now deciding to file their first IPO. In the year 2020 Paytm cut down its losses by about 42%. The company made a loss of $232 Million in the year 2020.
• Oyo Rooms:
Oyo Rooms was created by Ritesh Agarwal in 2013. And has been famous for a long time now. The main reason Oyo Rooms’ losses grew was that their growth demanded a huge amount of investment even before they could make any money. Oyo Rooms Loses saw a huge growth of about $280 Million in just a year. They had a loss of $50 Million in 2018, but the loss increased to $336 Million in the next year that is 2019.
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• Ola Cabs:
Ola Cabs was founded by Bhavish Aggarwal and Ankit Bhati back in 2010. Ola cabs have been an amazing startup. Moreover, the company has spread its wings and expanded to foreign countries like Australia, UK, and New Zealand. They have also been making a huge amount of losses. Ola Cabs has managed to cut down its losses from $435 Million to $375 Million in the years 2018 and 2019.
• Urban Company:
Urban Company, one of the Best and India’s largest Home service providers. Urban company has over 35,000 home service professionals. Moreover, they have expanded to countries like UAE, Singapore, Australia, and Saudi Arabia. Due to the expansion, Urban Company losses doubled in the year 2020.
The Famous CRED app that rewards its users to pay credit card bills on time. This company is trying to build a community of high-trust individuals. And this is the very reason that they have to spend a lot of money to get more customers through ads. The company has lost a huge amount of money about $50 Million yet.
That said, these are some of the most famous Loss-Making Startups in India. And as long as these companies keep up their growth and increasing their values. The VCs will keep on using money to keep the business running. Moreover, they’ll be sure to make a profit as well.
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