Cred, the Indian fintech company led by Kunal Shah, has been making waves in the financial technology sector since its inception. While the company continues to report losses, its recent financial filings reveal a remarkable surge in revenues and user engagement. In this article, we will delve into Cred’s financial journey, its strategies, and its focus on rewarding creditworthy individuals, all within the context of the evolving Indian fintech landscape.
Cred’s Financial Performance:
Cred’s recent financial statements for FY23 showed a loss of Rs 1,347 crore, an increase from the Rs 1,279.6 crore loss reported in FY22. These losses were primarily driven by a significant rise in expenses, with total expenses reaching Rs 2,832 crore, marking a 66% year-on-year increase.
Surge in Revenues and User Engagement:
Despite the losses, Cred experienced substantial revenue growth. Revenues from operations soared from Rs 393 crore in the previous year to Rs 1,400 crore in FY23. The company attributed this growth to a diversified product portfolio, resulting in higher Total Payment Volume (TPV). Cred reported a staggering increase in TPV, which reached Rs 4.4 lakh crore in FY23, up from Rs 2.5 lakh crore in FY22, a year-on-year surge of 77%. Additionally, user engagement thrived, with monthly transacting users growing by over 58% during FY23.
Cred also demonstrated efficiency improvements in its operations. Customer acquisition costs reduced significantly, decreasing by about 80% compared to the company’s launch five years ago. However, the same period saw a rise in employee costs, with employee benefit expenses increasing to nearly Rs 789 crore in FY23 from Rs 307 crore in the previous year. Cred explained that this increase was due to its priority of enhancing talent density within the organization.
Industry Trends and Prudent Financial Behavior:
The Indian fintech landscape has evolved, with investors becoming increasingly selective, favoring financially prudent startups. In contrast, easy funding has become a thing of the past. Fintech firms like MobiKwik have recently reported positive quarters, emphasizing the industry’s shift toward profitability.
Cred’s Future Focus:
Kunal Shah, the founder of Cred, remains optimistic about the company’s future. He stated, “Five years since launch, we believe that Cred and prudent financial behavior are becoming a habit for the top 1%.” The company’s primary focus remains on rewarding creditworthy individuals with innovative products that enhance their financial lives and lifestyles.
Cred’s financial journey showcases the dynamism of the Indian fintech sector. While the company faces losses, its impressive revenue growth, user engagement, and efficiency improvements indicate its resilience and potential for long-term success. As the Indian fintech landscape continues to evolve, Cred’s commitment to prudent financial behavior and innovation positions it as a significant player in the industry.