Astrotalk, the app that connects users with astrologers for consultations, is contemplating a potential initial public offering (IPO) in the Indian market by 2025-26, according to Puneet Gupta, the company’s founder and CEO. Astrotalk is currently reporting annual recurring transactions totaling Rs 600 crore, with a remarkable 100% year-on-year revenue growth over the past three years.
The company has its sights set on achieving Rs 2,000 crore in revenue within the next couple of years. However, Gupta emphasized that they will start preparing for the IPO once these numbers are achieved. He mentioned that they are still evaluating options at this stage.
While early-stage talks with bankers like JM Financial have occurred regarding the IPO, no formal appointment of a banker has been made yet. The company is currently in the process of fundraising and intends to plan for the IPO after that.
Astrotalk reported a revenue of Rs 282 crore for the fiscal year ending in March 2023, a significant increase from Rs 115 crore the previous year. The company’s profit after tax surged to Rs 27 crore from Rs 7 crore. With its current trajectory, the company anticipates posting a net profit of over Rs 100 crore on revenue of Rs 600 crore in FY24.
Astrotalk operates on a revenue-sharing model with its platform’s 15,000-plus astrologers. The bulk of the company’s revenue derives from chat consultations (65%) and calls (35%). Notably, it has gained popularity among non-resident Indians who contribute approximately Rs 100 crore to the company’s transactions.
The company is expanding its footprint into international markets, including Canada, the US, New Zealand, and Europe.
Astrotalk also has plans for an employee stock option buyback by the end of 2023. Currently, there is a 10% equity pool for these employees, who number around 200.
In addition to the impending IPO and fundraising, the company recently promoted its Chief Business Officer, Anmol Jain, to the role of co-founder. In his new role, Jain will oversee the company’s product development, finance, operations, expansion into international markets, strategic acquisitions, and team expansion.
Astrotalk has demonstrated impressive growth, boasting over 30 million registered users, with more than 400,000 being daily active users. The company’s expenses in FY23 covered astrologer and employee salaries, along with marketing costs, totaling Rs 230 crore.
Gupta’s journey in the startup world began with CodeYeti Software Solutions, an IT services company that eventually evolved into Astrotalk. The company initially assigned astrologers through a computer-generated system but later transitioned into a marketplace model that allowed users to choose astrologers, resulting in a significant boost in business.
Astrotalk operates with a commission structure, taking about 19-21% of the transaction charge, with rates on its platform primarily ranging from Rs 5 to about Rs 200 per minute. The highest price listed on the platform goes up to Rs 600 per minute.
While metro and tier-1 cities constitute 80% of the company’s user base in terms of revenue, there is still room for expansion in other cities, where the company has yet to establish a strong presence through advertising. Online ads are a key component of Astrotalk’s marketing strategy, and the company collaborates with a celebrity every month to endorse the platform, fostering trust and attracting users.
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With its impressive growth trajectory and strategic expansion plans, Astrotalk appears poised for further success in the evolving landscape of astrology and consultation services.
