MC EXPLAINER Burn to Earn: boAt, Licious, Urban Company lead the D2C shift towards profitable growth

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26 Aug, 2025 12:21

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India’s most recognisable consumer startups – ranging from boAt and Licious to Epigamia and newly listed Urban Company - are no longer clocking blistering growth rates seen during the pandemic years, yet the investor interest in new-age startups has not waned. Instead, several of these companies are being rewarded for pursuing profitable growth.

FY25 financial numbers have shown that the topline expansion for several marquee brands has tapered, yet investor appetite in these businesses remains strong, with valuations still benchmarked to ambitious revenue growth multiples.

Analysts believe the investors are no longer paying for hyper-growth, instead, they are rewarding sustainable business models, improving profitability and long-term visibility in India’s consumption cycle.

“The narrative has moved from growth at any cost to a more traditional, balanced approach. As long as the core business remains strong and profitable, companies will continue to attract investor interest,” said Ayush Patodia, Associate Vice President at Avalon Consulting, underscoring the shift.

Slowing Growth, But Steady Valuations

Licious, the online meat-delivery platform, known for triple-digit growth in early years, reported a moderate 16 percent rise in revenue at Rs 795 crore in FY25, according to Tracxn. Though the company is loss-making, it is diversifying into newer categories and delivery channels. Its post-money valuation of $1.45 billion - around 14.5x FY25 revenue - reflects long-term investor conviction, as it reportedly prepares for a $2 billion IPO next year.

Urban Company too has seen a similar pattern, with revenue rising by 36 percent in FY25 to Rs 1,261.8 crore while losses narrowed to Rs 247 crore from Rs 297 crore a year ago. The platform turned profitable on a consolidated basis with a Rs 240 crore net profit compared to a Rs 93 crore loss in FY24. Urban Company’s IPO was valued at $1.7 billion, which translates into roughly 11x FY25 revenue.

Read More: Urban Company Q2 FY26: Growth intact, but margins under pressure

Wearable brand boAt saw a one percent dip in FY25 revenue at Rs 3,097.8 crore after years of rapid expansion, yet its profitability surged, with operating income up more than fourfold and EBITDA up over 22x due to cost control and lower marketing spend. The company’s current valuation expectation of $1.3-1.5 billion (3.5-4x FY25 revenue) is still significantly higher than Noise, its peer, valued at around $466 million.

Read More: boAt's parent gets SEBI nod for Rs 1,500-crore IPO

Greek yogurt brand Epigamia has maintained a steady growth, but sharply reduced its net loss to Rs 174.4 crore in FY24 from Rs 670.1 crore.

Profitability Over Hyper-growth

Equity investments into India’s D2C startups touched $6.2 billion over 1,900 rounds between 2020 and 2025, Tracxn data has shown. The pandemic years saw over half of this, resulting in investment of more than $3.2 billion. In 2025 so far, funding totalled around $665.6 million spread over 242 rounds.

Read More: Quick commerce drives record festive season sales for D2C brands

“Short-term growth momentum is no longer the only criterion,” said Nitin Gupta, Partner, Investment Banking Advisory at EY India. “Investors want companies that have sustainable models - not growth at any cost, but growth with a profitable path.”

Gupta added that brands that have built meaningful scale enjoy far greater durability in India’s expanding consumer market. “India is not a one- or two-year story, it is a 25-year story,” he added.

While the pandemic-era boom may have faded, but investor interest hasn’t. Analysts maintain that the D2C space is entering a more disciplined phase, where profitability, unit economics and brand strength matter more than breakneck expansion.