Fintech Unicorn slice Spent INR 1.5 To Earn Every Rupee In FY23

SUMMARY

slice’s parent Garagepreneurs Internet Private Limited saw its consolidated net loss jump 60% YoY to INR 405.8 Cr in FY23

slice’s bottom line took a hit during the year under review despite a 199% jump in operating revenue to INR 846.7 Cr

In October last year, slice said it was merging with the North East Small Finance Bank

Garagepreneurs Internet Private Limited (GIPL), the parent entity of fintech unicorn slice, posted a 60% jump in its consolidated net loss to INR 405.8 Cr in the financial year 2022-23 (FY23) from INR 253.7 Cr in the previous fiscal year.

It must be noted that credit rating agency CARE Ratings, in a report last month, attributed GIPL’s loss in FY23 to higher opex and a sharp reduction in assets under management (AUM) due to the various regulatory changes.

slice’s bottom line took a hit during the year under review despite a 199% jump in its operating revenue to INR 846.7 Cr from INR 283.1 Cr in FY22.

Founded in 2016 by Rajan Bajaj, slice (previously known as Slicepay) functioned as a buy now pay later (BNPL) platform until FY22. It provided a credit card-based prepaid payment instrument (PPI) that came with no annual fees, interest, or late charges. However, during FY23, slice had to pivot its business after the Reserve Bank of India (RBI) barred NBFCs from offering credit on PPIs.

slice then started offering personal loans and UPI payments services.

In its FY23 financial filing, slice said it derives revenues primarily from internet handling fee, commission income from the services provided through its online platform, and interest and commission income from credit facilities provided to individuals.

Its fee and commission income jumped over 151% year-on-year (YoY) to INR 374.9 Cr in FY23 while interest income on loans surged 252% YoY to INR 471.8 Cr in the year.

Slice earned around INR 459 Cr as interest income on portfolio loans, INR 90.3 Cr as processing fee income, and INR 63.3 Cr as internet handling fees.

Including other non-operating income and interest income, slice’s total revenue stood at INR 867.8 Cr in FY23 as against INR 292.9 Cr a year ago.

Zooming Into Expenses

slice’s total expenses more than doubled to INR 1,272.6 Cr in FY23 from INR 542.5 Cr in the previous year, with employee costs being the biggest contributor.

Employee Benefit Expenses: The startup saw its employee costs jump a whopping 190% to INR 286.9 Cr in FY23 from INR 98.9 Cr the previous year.

In that, slice spent INR 229.7 Cr towards salaries and wages. Meanwhile, the startup’s employee share based payment (equity settled) jumped almost 4.9X YoY to INR 40.3 Cr in FY23.

Advertising Promotional Expenses: Ad spending was the second largest contributor to overall expenses, rising 25.7% YoY to INR 262.8 Cr in FY23.

Impairment Loss: The startup’s impairment loss stood at INR 255 Cr in FY23, a sharp rise from INR 58.2 Cr in FY22.

Subscriptions Membership Fees: slice’s spending in this bucket jumped almost 312% to INR 83.2 Cr in FY23.

Legal & Professional Expenses: The startup’s spending in this bucket grew to INR 51.5 Cr in the reported fiscal year from INR 8 Cr in FY22.

On a unit economics basis, slice spent INR 1.5 to earn every rupee from operations in FY23.

Following the regulatory hurdles and the subsequent changes in its business, slice announced its merger with the North East Small Finance Bank (NESFB) in October last year. The joint venture aims to integrate advanced technology solutions with initiatives aimed at promoting financial inclusion at the grassroots level.

Last month, NESFB appointed former Andhra Bank executive Satish Kumar Kalra as its interim MD and CEO. Kalra would spearhead the ongoing merger process between slice and NESFB.