CRED’s FY23 loss widens 5% to Rs 1,347 crore on increased expenses

Fintech unicorn CRED reported a 3.5 times increase in its total revenue for the 2022-23 financial year on Thursday. Total revenue jumped to Rs 1,484 crore in FY23 compared to the Rs 422 crore revenue it reported in the previous financial year and Rs 95 crore in FY21.

However, the payments company’s losses before tax grew by 5% to Rs 1,347 crore in FY23 compared to Rs 1,280 crore in FY22. CRED said its loss, excluding ESOP cost which was Rs 300 crore, reduced by 10% to Rs 1,047 crore in FY23 from Rs 1,167 crore in FY22.

The widening loss was primarily due to increased expenses, which jumped 66% to Rs 2,832 crore in FY23, compared to Rs 1,702 crore reported in FY22. Payment processing costs increased nearly four times year-on-year to Rs 705 crore, while employee benefit expenses shot up 156% to Rs 789 crore.

However, the company said that it had reduced its customer acquisition costs by almost 80% compared to when it began operations four years ago. This led to a reduction in marketing and business promotion expenses by 27% to Rs 713 crore in FY23 from Rs 975 in the year prior.

"Growth across revenue, scale, and engagement metrics as the breadth of products created platform advantages," the company said in a statement.

CRED’s monthly transacting users grew by over 58% in the previous year, and saw its total payment value jump 77% from Rs 2.5 lakh crore in FY22 to Rs 4.4 crore in FY23, the company said.

One-third of credit card bill payments (by value) in India are done on the platform, as per CRED, which added that it has become the 4th largest (by value) UPI app in the country.

“We strengthened the platform with more touchpoints for members to engage with CRED at a higher frequency in FY22-23. This resulted in significantly higher engagement that created monetization opportunities while reducing the cost of attracting and serving members,” the company said.

The company, which specialises in credit card payments and also has a D2C marketplace and a P2P lending vertical, has till date raised over $1 billion (Rs 8,000 crore) till date over 9 funding rounds, and was last valued at $6.4 crore in June 2023, according to private markets data platform Tracxn.