PC: Entrackr
DriveU today declared the culmination of fiscal year ending March 2024 with impressive revenue growth of 66 percent. Again, as in the previous year, this revenue growth has laid a solid foundation, but it will be the first time that it enters the books as a profitable venture.
The annual financial statement brought down from the Registrar of Companies reveals that operations revenue for DriveU more than trebled at ₹24.50 crore in FY23 from ₹14.75 crore in FY22, growth has been mainly driven by increases in platform revenues-a reflection of an increasingly bullish demand trend for on-demand driver services in various urban pockets.
Founded by Ashok Shastry and his son Rahm in 2015, DriveU has become ubiquitous, present in all the major metros such as Mumbai, Bengaluru, Delhi NCR, Hyderabad, Chennai, and Kolkata. The company functions round the clock that can provide services to their customers whenever needed, with a background of driver partners.
Despite the impressive revenue growth, DriveU has maintained a disciplined approach to expense management. The company reported a rise in direct expenses to ₹7.55 crore in FY24, up from ₹4.26 crore in FY23. Employee benefit expenses also increased by 21%, reaching ₹10.44 crore, which underscores the company’s commitment to attracting and retaining talent in a competitive labor market.
Perhaps the most notable success of FY25 for DriveU was the profit before tax it could raise at ₹11.35 lakh, having turned around its loss of ₹2.29 crore recorded the previous year. The primary reason why DriveU would be able to experience this kind of turnaround has, primarily been the result of good cost management practices. The finance costs have been minimized in FY25, recording a number of ₹82.11 lakh as against ₹1.18 crore in FY23, while depreciation and amortization were controlled to stand at ₹23.79 lakh for the year.
Also, articulate DriveU’s proactive management of its financial health in the form of significant long-term borrowings at ₹44.90 lakh for FY24 from ₹6.82 crore in FY23. An openness to debt reduction has also been manifested as an open manifestation of the attention exercised by the company towards stability in terms of financials and operational efficiency. Added to this is the improved working capital management that placed DriveU at a positive cash flow position wherein net cash from operations was reported at ₹2.18 crore.
The management hopes that the drive and endeavour that it put into making DriveU a success story will continue through FY25 and DriveU will comfortably cross ₹125 crore in sales. Enhancing service offerings will lead to expanded market share addition. Other strategic initiatives such as improvement and expansion of service offerings and enlarging its driver network will form an integral part of creating the mission for these targets.
The startup data intelligence platform, TheKredible, tells us that as of funding, DriveU has raised nearly ₹60 crore to date and is currently valued around ₹260 crore following their latest round of fundraising. This funds setting, therefore, places DriveU at a good position within the competitive market as it will be able to spend on the technological and marketing aspects to improve its user experience and efficiency in service.
The on-demand driver service has seen competition surge in the last few months. In March, Cars24 had attempted its entry into the space with the on-demand driver app, AutoPilot, but withdrew the service thereafter. PeakXV-backed Park+ entered the fray in June with launching its service. The primary market players include Drivers4Me, Driverzz, PickMyCar, and Namma Driver, fighting among each other for a piece of the burgeoning demand for the driver services.
All in all, having experienced phenomenal growth and now having been in profit, DriveU exhibits a perfect business model and careful management by the management team. As the company continues to expand its footprint and improve its service offerings, it is best positioned to benefit from the very urgent demand for on-demand driver services within India’s rapidly urbanizing landscape. With strong financial backing and an evidently clear growth strategy, DriveU is well-prepared to be the leading player in the evolving mobility space.
