GetNinjas: “I have cash for 25 years in the company”, says founder
Company reduced cash burn by almost 80% by cutting marketing investments
at GetNinjas, did what it promised in the first quarter: it reduced the company’s growth to preserve resources. He even put his foot on the brakes in marketing. The company’s cash burn was R$3.1 million from January to March, compared to R$14.5 million in the last quarter of 2021.
The other side of this coin: net revenue grew slightly. Net sales totaled R$ 15.8 million, an expansion of around 3.5% both in the annual and quarterly comparison. With more contained expenses, the losses in the Ebitda line decreased: from R$ 10.4 million to R$ 6.3 million compared to the previous quarter. At the height of the acceleration, in the second quarter of 2021, Ebitda was negative by more than BRL 19 million.
With high cash and the same income — which generated financial income — GetNinjas’ net loss was BRL 3.7 million, compared to BRL 7 million from October to December.
L’Hotellier’s stance shows that the old maxim “cash is king” is not exclusive to the old economy. In the current scenario, it applies to everyone, including startups – or especially to them. “I have cash for 25 years in the company, at the current pace”, he emphasized, with the caveat that this is far from being the ideal environment for both GetNinjas and any business. The bank balance, which was R$ 293 million in December, ended March at R$ 290 million.
The company debuted on B3 valued at R$ 1 billion. The initial offering moved R$ 550 million and, of this total, R$ 330 million were new resources, that is, cash. Now, the company is worth less than the money it has invested in the bank: it closed yesterday at R$ 215 million, after a rise of more than 16%. “My cash will have my market value 12 years from now,” L’Hotellier said wryly, to make the distortion evident—not as a forecast.
When it decided to list the shares on the stock exchange, GetNinjas had as its main plan to put the money in marketing: about 60% of the volume raised had this destination planned. And the difference would be allocated to team and technology, which would make the company more robust, including for acquisitions and mergers.
Marketing is relevant to all startups, but there is an extra component that makes it a strategic element for GetNinjas. In L’Hotellier’s view, the biggest challenge of its business is still cultural. “Most people hire service by referral. This is a very powerful solution to challenge,” he points out. But he bets that, with time and digitalization, this type of solution will gain even more relevance. “People have already learned to stay at strangers’ houses, with Airbnb, to get into strangers’ cars and even accept bullets and water”, compares the entrepreneur, referring to Uber.
The expectation is that, at the current rate of expenses, the margin will continue to advance towards the company’s break-even, even if at a slower pace. The executive explained that the moment, although challenging on the cost of capital side, allows for a deceleration in marketing expenditures because the competition in his model also did not advance as everything indicated it would. In the past, there was an expectation that product marketplaces would also add service solutions, but the trend ended up not happening. The large marketplaces, such as Mercado Livre, Magazine Luiza, Via, are all still focused on the effort to expand the variety of goods offered to consumers.
But, L’Hotellier is very aware of the moment and the position of the company, having raised funds. “There are much bigger pains than cutting back on marketing investment, that’s for sure.” From the entrepreneur’s perspective, the moment can, even if it is not the most desirable, favor the company, including in the hiring of talent.
“There are many good professionals who were stuck with option plans that, at that moment, will turn to dust.” The moment, moreover, may begin to open space for the company to resume talks on acquisitions and mergers, which have been frozen since the end of last year. For now, there is nothing on the front and that is not the objective: the focus is to make the business stronger, now that the company has matured processes and even solutions. Today, GetNinjas has a different application for professionals and for clients, each one with a focus on facilities for each audience.
The company ended March with 207 thousand active professionals (those who effectively buy the leads generated by the company), an expansion of more than 47% in the annual comparison – and with a recurrence rate of more than 78%. The total number of customer requests ended the January-March range at 1.4 million, an 8% increase over the first quarter of 2021.