Neobank Open Financial Tech sees 17 percent revenue drop in FY24 as costs fall

Neobank Open Financial Tech sees 17 percent revenue drop in FY24 as costs fall

Open Financial Technologies, a neobank focused on small and medium enterprises, reported a 17% decline in revenue for FY24, while its net loss narrowed to Rs 168.5 crore from Rs 243.8 crore the previous year.

According to RoC filings obtained through Private Circle research, the company's revenue from operations dropped to Rs 24.8 crore, down from Rs 29.9 crore in FY23. However, expenses fell by 35% to Rs 192 crore, primarily due to an 85% reduction in advertising costs, which decreased from Rs 57.7 crore in FY23 to Rs 8.8 crore in FY24. Employee expenses, the largest portion of the company's outlay, also declined by 24% to Rs 112.8 crore during the same period.

Founded in 2017, Open Financial Tech has struggled to scale its revenue to match its unicorn valuation, achieved in 2022 following a $50 million Series D round led by IIFL, with backing from Temasek Holdings and Tiger Global Management. The company has raised a total of $186 million over seven rounds of funding, according to Tracxn. Despite its revenue challenges, Open continues to hold promise after receiving a payment aggregator license from the Reserve Bank of India in 2022.