Real-money gaming platform Zupee turned profitable in FY24, marking its first full year of profitability since inception in 2018.

The startup claimed that it posted a profit after tax (PAT) of INR 146 Cr in FY24 as against a loss of INR 36 Cr in the previous fiscal year, as revenue zoomed. Its top line surged 36.5% to INR 1,123 Cr from INR 823 Cr in FY23.

It is pertinent to mention that the GST Council imposed a 28% GST on the full face value of bets, effective from October 1, 2023. As such, the FY24 financials only reflect the impact of this change for six months. The full-year impact of the new GST framework will be seen in FY25 numbers.

“While the 28% GST implementation in the latter half of the year posed structural challenges across the gaming industry, Zupee Ludo sustained its momentum through operational agility, early adaptability, and a product-first approach,” Zupee said in a statement.

Founded in 2018 by Dilsher Malhi and Siddhant Saurabh, Zupee offers online casual and board games like ludo, trump cards, and snakes & ladders.

It claims to have more than 100 Mn users across 4,000 cities. The startup was valued at $600 Mn during its last funding round in 2022, when it raised $102 Mn from Mumbai-based Nepean Capital and others.

Meanwhile, Zupee’s total expenses grew 11.7% to INR 1,019 Cr during the year under review from INR 911.9 Cr in FY23.

The startup said that marketing and user incentives was the biggest expense head in FY24, with it spending INR 806 Cr on it in FY24. Notably, Kapil Sharma is the brand ambassador of Zupee.

The gaming platform’s employee benefit expenses rose to INR 107 Cr from INR 96 Cr in FY23.

Zupee competes against startups like Dream11, MPL, WinZO, Gameskraft in the real-money gaming segment.

It is pertinent to mention that MPL also achieved breakeven in FY24, reporting an adjusted EBITDA of $0.2 Mn (around INR 1.7 Cr). Its revenue from operations grew 22.2% to INR 1,068 Cr in FY24 against INR 873.7 Cr in FY23.

Talking to Inc42, Zupee cofounder and CEO Malhi said that despite the ongoing startup IPO boom, it is unlikely that a gaming company would go for a public listing before there is clarity on regulations.

He was referring to the 28% GST regime for the real-money gaming sector, which has hit the industry hard. Following the new GST regime, gaming companies have received tax demand notices of about INR 1.12 Lakh Cr for the period between 2017 and 2023. Industry players have argued that the authorities are levying 28% GST retrospectively.

Earlier this year, the Supreme Court gave a breather to the industry by granting a stay on GST proceedings and show-cause notices sent to 49 online gaming companies. The SC is set to hear the matter in May this year.

Malhi highlighted that IPO helps startups provide exit to their early investors, however, the regulatory issues have put a spanner in the works.

“For any company at our scale, an IPO is a natural path to provide liquidity and return capital to investors. But until we have the necessary regulatory clarity, that path remains uncertain,” he added. the company noted.

Talking about Zupee’s future plans, the cofounder said that it is looking to add fantasy games and card games (like poker and rummy) to diversify its offerings. However, he didn’t provide a timeline for this.

Underlining the potential in other real-money gaming segments, Malhi noted that fantasy gaming has a market size of about $1.2 Bn to $2 Bn in India. The same for rummy is at about $1.5 Bn to $1.8 Bn and for Poker at around $300 Mn, he added.

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