Cost Optimization Initiatives

Initiative Description Impact on

PNL

Telephony Cost Shift from Tata (INR 500 per port) to -66%
Reduction Airtel (INR 100 per port) in telephony Telephony
infra. Ports affect concurrency. Cost (+19%
GM)

Cloud Transition to a unified resource pool Up to -50%

Infrastructure for groups of clients from separate Cloud
Optimization & environments, reducing cost and Infrastructure
Scaling enhancing efficiency. Deploy Azure Cost (up to
Reserved VM instances. +24% GM)

Implement model quantization to

reduce size and inference time.

Implement Kubernetes clusters to

optimize infra.

Workforce Reduce workforce from 150 to 80 by Operating

Optimization and adopting a platform-first and Cost
hiring freeze generative AI-led approach, achieving Reduction by
a more cost-effective operating 27%
model. (Already reduced to 110)

No further increase in team size until

we hit $3 Mn ARR.

SaaS-based Introduce structured plans for new Predictable

Pricing Model and clients (beginner, essential, pro, inflows. Up to
Monetization of enterprise). Monetize currently +30 %
Premium Features uncharged premium features & revenue
& Services services.

Outsource services to client teams

through DIY platform. Any service
 requires Premium Support in plan.

In-house AI Invest in in-house GPUs for training Long-term

Training Infra AI models. This upfront cost (~$700k Cloud
over 2.5 years) will lead to 10x savings Infrastructure
compared to cloud-based training. Operating
Cost
Reduction

This plan, enacted since OND'22, brought us to a positive gross margin as of

January 2023, with an increase to ~ 40% by OND'23. We will improve our gross
margins to 55% by the end of FY2024 and 78% by the end of 2024. We anticipate
steady-state gross margin over 85%.

Below is a brief note on our revenue growth, gross margin trend and
the cost optimization initiatives that are driving us to operating
break even by Jan-Mar '24. All figures are in INR.

Change in Unit Economics

Apart from Cost Optimizations, another driver of the business

growth is a change in our pricing model which we have already
aligned with 3 new customers.

Prev. volume-based model, where the units are "no of picked up

calls".

- Revenue per call : INR 1.8

- Cost per call : INR 0.87

We have changed our pricing to a Success "Flat" Fee for earlier

buckers and Success % Fee for later stage buckets (DPD30+). The
platform fee is charged separately on a tiered monthly/annual SaaS
plan that’s waived off to ease buying decisions for the time being.

Both Success Fee types will help Unit Economics improve.

For e.g. for Success "Flat" Fee

Revenue per collection : INR 20 (being given by L&T)
Cost per collection : INR 6.09 (for 7 attempts - avg no for collecting
per user)

This is a 1.5x improvement. It will further grow with Success % Fee

Type charged for later buckets based on loan size.

Last 3Mo. Revenue

Aug '23 57.71 L
Sep '23 69 L
Oct'23 85 L