Despite a 75.4% YoY rise in operating revenue to INR 613.8 Cr in FY23, Cashfree Payments’ net loss surged due to a sharp jump in employee costs
Total expenses more than doubled to INR 750 Cr in FY23 from INR 354.2 Cr in the previous year
Cashfree spent INR 445.5 Cr as payment gateway processing charges in FY23, a jump of 114.4% from INR 207.8 Cr in the previous year
Fintech platform cashfree
Payments saw its net loss widen a whopping 46X to INR 133.1 Cr in the financial year 2022-23 (FY23) from INR 2.9 Cr in the previous year, hurt by a sharp jump in its employee costs.
Cashfree’s operating revenue increased 75.4%, or 1.7X, to INR 613.8 Cr in the reported fiscal year from INR 349.9 Cr in FY22.
Founded in 2015 by Akash Sinha and Reeju Datta, Cashfree operates a full-stack digital payments solution platform. It enables businesses to collect payments and also offers API banking solutions. The startup earns a majority of its revenue from the sale of services, with commission income comprising a majority part of it.
Cashfree’s commission income increased 75.4% year-on-year (YoY) to INR 613.3 Cr in FY23. On the other hand, the startup earned INR 51.4 Lakh as setup fees from merchants.
Including interest income and other non-operating income, Cashfree’s total revenue stood at INR 616.9 Cr in FY23 as against INR 350.3 Cr in the previous year.
Backed by the likes of Y Combinator, State Bank of India, Apis Partners, and others, the startup has so far raised over $40 Mn in funding. It competes with the likes of Razorpay, Bill Desk, and PayU.
In FY23, Cashfree, along with Open, PayNearby, and Fairexpay, also received a nod from the Reserve Bank of India (RBI) for cross-border payments in the country.
Where Did Cashfree Spend?
Cashfree’s total expenses more than doubled to INR 750 Cr in FY23 from INR 354.2 Cr in the previous year, with employee benefit expenses accounting for the biggest part of it.
Employee Costs: The startup spent INR 198.4 Cr as employee benefit expenses during the year under review, which was a 107.5% jump from INR 95.6 Cr in FY22.
In that, INR 182.2 Cr was spent on salaries and wages.
The startup’s employee costs surged despite it laying off 80 employees as part of a restructuring exercise in early 2023. Sources told Inc42 at that time that the number of employees impacted by the layoffs could be as high as 120. Cashfree had said in a statement that 6-8% of its total headcount was impacted by the organisational restructuring exercise.
Processing Charges: Cashfree spent INR 445.5 Cr as payment gateway processing charges in FY23, a jump of 114.4% from INR 207.8 Cr in the previous year.
Advertising Promotional Expenses: It spent INR 37.9 Cr on ads and promotions in the reported period as against INR 16 Cr in FY22.
Miscellaneous Expenses: The startup’s miscellaneous expenses comprised domain charges, reseller commission, software expenses, provision for doubtful advances, among others.
Altogether, Cashfree spent INR 42 Cr in this bucket in FY23, a rise of 72% YoY.
As part of its expansion plans, Cashfree launched ‘BNPL Plus’ last year to help businesses increase the visibility of affordable and flexible payment options to their customers. The company also partnered with Shopify to provide onsite payments service with cards for the Canada-based ecommerce platform’s Indian merchants.
In September 2023, Cashfree partnered with the National Payments Corporation of India (NPCI) to launch ‘AutoPay on QR’ for subscription-based enterprises. Recently, it also received final approval from the RBI to operate as a payment aggregator.
