Neobanking startup dwindles during FY21: Reports 80Cr loss

The company’s operating revenue dwindled 4% to Rs 24.30 crore in FY21

Niyo’s expenses were also reduced by 4% to Rs 112.22 crore in FY21 from Rs 117.19 crore in FY20. 

Neobanking startup Niyo, one of the first movers in India’s customer-focused neo banking industry with a focus on the blue-collar group is yet to hit critical scale despite its early mover advantage. Niyo’s revenue increase in its fifth fiscal year (FY21) has been negative.

The company’s operating revenue fell 4% to Rs 24.30 crore in FY21, down from Rs 25.32 crore the previous year. Service fees came in Rs 20.8 crore, or 86 percent of total operating revenue, while support services brought in Rs 2.8 crore, or 11.6 percent of total operating revenue.

Niyo’s ultimate holding company is based in the United States, while Finnew Solutions Private Limited owns and runs the company’s operations in India. Service charge revenue climbed 24.58 percent to Rs 20.83 crore in the past fiscal year, up from Rs 16.72 crore in the previous fiscal year. Business support services, on the other hand, fell by 66% to Rs 2.83 crore in FY21 from Rs 8.39 crore the previous fiscal year.

Niyo’s expenses were also cut by 4% to Rs 112.22 crore in FY21, down from Rs 117.19 crore the previous year. Salaries and other benefits provided to employees were the company’s largest cost centre in FY21, accounting for 65 percent of total expenses.

While the pandemic may have been a major factor in Niyo’s scale decrease in FY21, it appears that the potential for profit via neo banking is limited. Experts also point out that in order to create income, such organisations must offer credit and other financial services.

To tap into the younger environment, the company launched Niyo Money and NiyoX, which offer mutual funds and stock investments. However, it is unclear how these activities will aid Niyo in producing revenue in the current fiscal year (FY22).

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