ToneTag, a provider of contactless payment solutions, has made a dramatic comeback, doubling its sales in the fiscal year ending March 2024, after experiencing modest growth in the previous two years (FY22 and FY23). By substantially reducing expenses, the Bengaluru-based company has achieved profitability for the first time since its founding in 2014. ToneTag's operating revenue increased by 111.7% to Rs 47.78 crore in FY24, compared to Rs 22.57 crore in FY23, according to its financial statement filed with the Registrar of Companies.
ToneTag provides three product categories for businesses: voice commerce, online shop, and in-store solutions, catering to retail and food and beverage industries. With its Oyeti platform, businesses can incorporate voice-powered interactions for purchasing, ordering, and payment. For clients, its VoiceSe UPI payment solution enables voice-based transactions that do not require internet connectivity.
In FY24, the company collected Rs 30.87 crore from upfront customisation services, which accounted for 64.6% of total operating revenue. Revenue from smart stores fell 53.8% to Rs 10.33 crore year on year (YoY), from Rs 22.36 crore. The company also earned Rs 4.14 crore in monthly payments from enterprises, Rs 1.63 crore in one-time integration fees, and Rs 81 lakh in license fees.
Employee perks accounted for 49% of total expenses. This cost was nearly constant at Rs 13.22 crore over the previous fiscal year (FY24). Finance costs increased by more than five times to Rs 2.49 crore, while telephone cum IVR prices increased by 143.8% to Rs 2.17 crore during the same period.
Overall, the company spent Rs 26.95 crore in FY24, which was 9.3% less than FY23 (Rs 29.70 crore). ToneTag became profitable in FY24, with Rs 20.94 crore in earnings compared to Rs 6.12 crore in losses in FY23, thanks to significant scale expansion and cost efficiency. In FY24, operating cash outflows grew by 73.6% to Rs 2.24 million.
ToneTag's improved bottom line also helped it achieve a positive EBITDA margin and ROCE, which increased to 54.18% and 30.09%, respectively. The firm spent Re 0.56 to earn a rupee of operating revenue in the previous fiscal year.
At the conclusion of fiscal year 24, the company reported Rs 1.6 crore in cash and bank accounts. However, its current assets nearly tripled to Rs 41.94 crore, owing to a large increase in trade receivables over the period.
According to media sources, ToneTag is seeking $50 million in primary and secondary capital from Iron Pillar and other investors. According to a credible source, ToneTag has raised over Rs 90 crore ($11 million) to date and was valued at roughly Rs 800 crore which comes to about USD 96 million) in its most recent round. The company, which is backed by Amazon, Reliance, and 3one4 Capital, has not raised a fresh round in over six and a half years. ToneTag competes with Paytm, PhonePe, PineLabs, BharatPe, MobiKwik, and other vendors of contactless payment solutions.
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