CRED’S FY22 Loss Surges 2.4X YoY To INR 1,279 Cr Led By Rise In Marketing Expenses

Bengaluru-based fintech unicorn CRED has reported a loss of INR 1,279 Cr for the financial year 2021-22 (FY22), up 2.4X from a loss of INR 524 Cr incurred in FY21, due to acquisitions and marketing expenses.

Revenue from operations grew 4.4X to INR 393.5 Cr from INR 88.6 Cr in the previous fiscal. Total income during the period under review stood at INR 422 Cr, up 4.4x from the year-ago period.

Founded in 2018 by Kunal Shah, CRED has been one of the fastest-startup to acquire unicorn status in India. The company, which started as a credit card bill payments app, now supports utility bill payments via CRED Pay, P2P lending via CRED Mint, CRED Store, CRED Cash for loans, and Scan-and-Pay for UPI.

Backed by investors such as Sequoia Capital India, Tiger Global, DST Global, GIC Singapore and Alpha Wave Capital, CRED has raised over $800 Mn to date, including its latest Series F Funding in June 2022. The company claims to have 11.2 Mn active users.

CRED’s member community grew 50% to 11.2 Mn in FY22 from 7.5 Mn in FY21. The company has managed to show a 4.4x rise in its total income to INR 422 Cr from INR 95 Cr in FY21.

Targeting the top 30-40 Mn creditworthy households in India, CRED spent approximately INR 975 Cr on marketing and business promotion programmes, including IPL ads. Further, the startup acquired two companies – HipBar, an alcohol delivery app, for an undisclosed amount and Happay, a corporate expense management startup, for INR 1,486 Cr. In FY 22, it also participated in the Series A round of a fintech platform Yubi.

The company claimed that its total income has grown 24X since FY20, mainly due to the number of product lines it launched in FY22. The focus has been on scaling the adoption of existing products and launching new products to help members save, spend and grow their money, it said in a statement.

“This is the beginning. We’re getting this revenue from a combination of factors as people are engaging more on our platform in depth and breadth. Overall, we would continue to invest in the growth of the platform, through the community and all of these things this year, and next year,” said Shah.

On the engagement level, Shah claimed that over 90% of members redeem at least one reward on the CRED app every month.

CRED Offered 50% Of Salaries In ESOPs 

To retain talent, the company launched an accelerated wealth programme for its employees in FY21. Under the programme, the company offers 50% of its employees’ salaries in ESOPs. Most of the employees opted for the programme, Shah said.

CRED further facilitated an ESOP liquidity programme in FY22, which led to an increase in share-based payments to employees.

Shah said, “CRED team members have stock in the company, thanks to AWP programme where individuals from our team can actually decide to take up to 50% salary cut, and take stock instead. If we could create hundreds of owners and focus on the right customer set, the right industry, we will get there [profitability] in terms of building the company.”

“This is why we have been consistently ranked the number one startup on eNPS score among all the Series B+ startups,” Shah said.

Speaking about the company’s monetisation plans, Shah said the company has seen an uptake in almost all products that it has launched. “We largely have two big themes, we cross-sell products or financial services and cross-sell merchant products, two different formats and we have seen an uptake in both of them. I think as a company, it is very evident that we will be a multi-line company,” he added.