Cred remains in losses; revenues surge substantially in FY23

NEW DELHI: Kunal Shah-led fintech firm Cred continues to remain in the red. The company posted losses of Rs 1,347 crore on a consolidated basis in FY23, higher than losses of Rs 1279.6 crore reported in FY22, the firm’s financial filings showed. The losses came on the back of higher expenses—the startup’s total expenses increased by 66% year-on-year to Rs 2,832 crore in FY23.

Cred’s revenues, though, surged substantially.

The company’s revenues from operations shot up to Rs 1,400 crore in FY23 from Rs 393 crore in the year ago period. In a statement, Cred said that a broader mix of products resulted in higher total payment volume (TPV) and revenue. The company claimed that its TPV grew to Rs 4.4 lakh crore in FY23 from Rs 2.5 lakh crore in FY22, a year-on-year increase of 77%. “Members spent more time on Cred resulting in higher attention and use of multiple products. More than half of our transacting members use two or more Cred products every month,” the company said, adding that its monthly transacting users grew by over 58% during FY23.

Cred said that its customer acquisition costs reduced by about 80% compared to its launch five years ago. An analysis of the company’s financials showed that its marketing expenses reduced on a y-o-y basis in FY23 but its employee costs shot up. Employee benefit expenses rose to nearly Rs 789 crore in FY23 from Rs 307 crore in the previous year. “Increasing talent density remains priority, leading to an increase in employee benefit expenses,” the firm said.

Earlier in the day, fintech firm MobiKwik said that it has delivered a second straight PAT (profit after tax) positive quarter. With easy funding a thing of the past and investors choosing to bet only on financially prudent startups, companies are making attempts to rein in expenses, trim their cash burn and inch towards profitability.

“Five years since launch, we believe that Cred and prudent financial behaviour are becoming a habit for the top 1%. Our focus remains on rewarding the creditworthy with more products that improve their lives and lifestyles,” Shah said. Cred was last valued at $6.4 billion after it secured $140 million in funding from investors in June 2022.

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