Five year old Eloelo reports zero revenue and Rs 99 Cr loss in FY24

Venture capital firms Play Ventures, along with existing backers Westbridge and Kalaari, have shown strong conviction in the potential of live social entertainment startup Eloelo. Together, they have infused $50 million into the company, including a recent $13 million round. However, the five-year-old firm remained in the pre-revenue stage until March 2024 (FY24) while continuing to incur losses.

While the company posted zero operating revenue during FY24, it made Rs 5 crore from interest on fixed deposits, according to the firm’s annual financial statements sourced from the Registrar of Companies (RoC).

Eloelo is a social gaming and live streaming platform that brings native activities like tambola, antakshari and musical chairs in live formats with creators hosting games for their community of fans.

The Bengaluru-based company spent heavily on marketing to attract and retain users. Advertising and promotional expenses were its largest cost center, accounting for nearly 38.5% of total expenses, more than doubling to Rs 40 crore in FY24 from Rs 17 crore in FY23. 

Employee benefit expenses also rose 2.4X to Rs 24 crore, while spending on content creators stood at Rs 14 crore. Technology costs amounted to Rs 14 crore, forming over 13% of the overall expenses, while other overheads contributed another Rs 12 crore in FY24.

Overall, Eloelo’s total expenses surged 2.3X to Rs 104 crore in FY24 from Rs 45 crore in FY23. Consequently, the company’s net loss widened 2.3X to Rs 99 crore in FY24 compared to the previous fiscal year.

The WestBridge-backed firm recorded current assets worth Rs 166 crore in FY24 including Rs 149 crore in cash and bank balance.

According to TheKredible, Eloelo has raised a total of $50 million in funding till date, having WaterBridge Ventures as its lead investors. The company’s co-founders Saurabh Pandey and Akshay Dubey together own 20% of the company.

Eloelo is clearly one of those rare bets from VCs where they have bought into the passion and charisma of the founders, knowing fully well that the idea is an all or nothing pitch. If it catches in, it will catch on like a fire at a fuel pump, and if it doesn’t, it’s more likely to be a painful, dark flame out like a tyre burning out. At this stage, we certainly like the audacity, but fail to catch the smell of success anytime soon. At the level of expenses Eloelo has, there are enough beneficiaries at the moment from the cash burn for the firm to do far better than the zilch it has to show for revenues. If it’s advertising it wants, the first deals should be in soon, almost 5 years after it launched. If it is hoping to have paying customers, then it needs to start charging before paying sounds like a crazy idea. With a claimed 150k creators and 80 million users, this aversion to monetising is frankly, beyond our pay grade for now.