ZingHR posts Rs 84 Cr revenue in FY23; losses surge 84%
ZingHR, the HR tech platform, has witnessed a notable growth in its operating scale for the fiscal year ending in March 2023, marking a 51% increase. Despite the positive leap in revenue, the company’s losses have significantly outpaced its revenue ascent, nearing an 84% increase to Rs 21 crore within the same timeframe.
Backed by Tata Capital, ZingHR reported a revenue from operations of Rs 84.48 crore in FY23, up from Rs 55.77 crore in the previous year, as per the consolidated financial statements with the Registrar of Companies (RoC). The platform offers a comprehensive solution for recruitment, payroll, employee management, and talent management. It now serves over 1,100 global customers and maintains more than two million active users across eight countries.
The primary revenue stream for ZingHR has been its subscription-based software, which experienced a 51.48% surge during FY23. Additionally, the company garnered Rs 1.63 crore from finance income, which contributed to its total revenue reaching Rs 86.1 crore in the last fiscal year.
The company’s expenditure on employee benefits, which makes up 55.52% of its overall costs, jumped 48% to Rs 59.2 crore in FY23 from Rs 39.8 crore the year before. A significant 61.5% rise in total expenditure to Rs 106.69 crore was also recorded in FY23, compared to Rs 66.05 crore in FY22, which encompassed marketing, product maintenance, professional fees, server costs, data security, and other overheads.
This spike in expenditures led to the company’s losses jumping by 84.4% to Rs 20.56 crore in FY23. Additionally, its Return on Capital Employed (ROCE) and EBITDA margin took a hit, worsening to -54% and -23%, respectively. Essentially, ZingHR spent Rs 1.27 to earn a single rupee in FY23.
ZingHR has raised approximately $13 million to date, including a $10 million infusion from Tata Capital. Tata Capital emerges as the largest external stakeholder with a 35.82% share, followed by Erasmic Venture Fund and Triton Fund.
Despite Tata Capital’s substantial stake indicating confidence in ZingHR and its founders, the company is navigating through a sector rife with competition and minimal product differentiation. Price elasticity remains a challenge due to the few distinct features between offerings in the HR tech space. The industry may face difficulties in securing additional capital unless disruptive innovations emerge. The technological costs for HR tech firms, as much as the technology they offer to clients, will play a crucial role in determining their future.
