Fave bounces back from Covid-19, cuts losses

This year has been busy for Fave. In April, Indian merchant platform Pine Labs acquired it in a deal worth over US$45 million. Fave has also entered the scorching – but highly competitive – buy now, pay later (BNPL) market.

Photo credit: Fave

Looking at its 2020 financial report, nothing much has changed revenue-wise for the Singapore-based online rewards platform over the last four years – its revenue figure has been hovering at around US$10 million. That said, the company significantly cut its losses last year for the first time since 2017.

Fave shaved almost 30% of its total losses in the financial year ended December 2020 to US$7 million from US$9.9 million the previous year. This is mainly due to the company reducing its total expenses, including its cost of sales.

Amid the pandemic, Fave kept its burn rate low across the board. In 2020, its administrative costs were down 20% annually to US$9.3 million, while its marketing budget was cut by almost 41% to just US$764,000. The company also whittled away 18% of its total employee benefits expenses.

Bouncing back at a lower cost

The lower spending is in line with what Fave CEO and co-founder Joel Neoh told Tech in Asia earlier this year. The company implemented pay cuts and slashed its workforce to mitigate the effects of Covid-19 last year. It also reduced infrastructure costs by 30% to 50%.

The CEO declined to respond to Tech in Asia’s questions on Fave’s financial results.

While the platform’s revenue has not increased significantly over the years, this should be examined in the context of the Covid-19 pandemic.

The fact that Fave’s 2020 revenue saw a minor increase from 2019 may indicate that it bounced back and adjusted well to the health crisis. Since its revenues largely come from retail merchants that operate offline, Neoh previously said that the firm saw about a 60% to 70% hit in its revenues during the period of lockdowns in Southeast Asia.

Fave offers consumers hundreds of deals daily from its merchant base of restaurants, cafes, spas, salons, and gyms. On top of that, its mobile payment method, FavePay, allows users to pay for their purchases using their smartphones and receive cashback rewards at the same time.

Fave gets rewarded