Neeman’s achieves robust revenue growth at Rs 69 crore in FY23; incurs increased losses

Neeman's revenue: Sustainable footwear startup Neeman’s has reported a noteworthy 48.81 per cent surge in revenue, reaching Rs 69 crore in FY23, compared to Rs 47 crore in FY22, according to the company's annual financial statements filed with the Registrar of Companies. However, this growth has been accompanied by a substantial increase in losses, soaring by 43 per cent to surpass the Rs 100 crore mark.*

Neeman’s, known for its five-year commitment to crafting footwear from sustainable materials such as merino wool, organic cotton, recycled PET bottles, and recycled tires, primarily relies on the sale of its products through its website and various e-commerce platforms for income.

Despite its admirable sustainability efforts, the cost of raw material procurement for Neeman’s accounted for 39 per cent of its total expenditure, witnessing a 42.9 per cent increase to Rs 40 crore in FY23 from Rs 28 crore in FY22. Additionally, employee benefits experienced a surge of 2.25X during the same period.

The total expenditure for Neeman’s, covering advertising, business promotion, freight, commissions, information technology, legal, and other overheads, rose by 43.06 per cent to Rs 103 crore in FY23 from Rs 72 crore in FY22. The company anticipates increased advertising costs in the ongoing fiscal year, having enlisted Indian cricketer Jasprit Bumrah for campaigns in October 2023.

As the total cost crossed the Rs 100 crore mark in FY23, Neeman’s reported losses of Rs 34 crore, marking a 36 per cent increase from Rs 25 crore in FY22. Its Return on Capital Employed (ROCE) and Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin stood at -114 per cent and -46.5 per cent, respectively. On a unit level, the brand spent Rs 1.49 to earn a rupee in FY23.

To date, Neeman’s has raised Rs 94 crore, with Sixth Sense Ventures holding the largest external stake at 42.94 per cent, followed by Anicut Capital. Co-founders Taranjeet Singh Chhabra and Amar Preet Singh cumulatively command 29.68 per cent of the company.

Despite its sustainability efforts, Neeman’s faces challenges in attracting profitable buyers. The brand, having recycled over one million plastic bottles, must explore diverse strategies, including distinct designs and influencer collaborations, to solidify its position in a competitive sustainable market. With sustainability becoming more commonplace, Neeman’s needs to innovate to maintain its appeal and navigate the evolving landscape of eco-friendly consumerism.