Fintech Unicorn slice’s FY22 Loss Surges 2.5X To INR 254 Cr

Bengaluru-based fintech unicorn slice’s consolidated net loss widened 2.5X to INR 253.7 Cr in the financial year 2021-22 (FY22) from INR 100.4 Cr in the prior fiscal year, hurt by a significant surge in advertising expenses.

However, the operating revenue of the fintech startup, primarily founded as a lending platform catering to students and young adults, jumped 4.2X to INR 283.1 Cr from INR 67.7 Cr in FY21.

slice (formerly Slicepay) was founded in 2016 by Rajan Bajaj. In FY22, the fintech startup operated as a buy now pay later (BNPL) platform, offering a credit card-like prepaid payment instrument (PPI) with no annual charges, no interest, and no late fees. However, it stopped this offering last year following regulatory issues. More about this later.

As per its FY22 regulatory filing, slice earned revenue primarily from internet handling fees, commission income from the services provided through its online platform, and interest and commission income from credit facilities provided to individuals.

slice earned about INR 149 Cr as fee and commission income in FY22 as against INR 42.1 Cr in FY21. On the other hand, its interest income on loans stood at INR 134.1 Cr in the year under review compared to INR 25.6 Cr in the prior fiscal.

Total income rose 4.3X year-on-year (YoY) to INR 292.9 Cr in FY22.

It must be noted that the startup also entered the unicorn club in FY22 after raising $220 Mn in its Series B funding round led by Tiger Global and Insight Partners. Months prior to that, in June 2021, slice raised $20 Mn in a fresh equity funding round led by Blume Ventures and Gunopsy Capital.

Amidst the strong growth in business and new funding rounds, slice’s expenditure towards advertising and promotions jumped a whopping 33.8X to INR 209.8 Cr in FY22 from INR 6.2 Cr in the previous fiscal year.

Advertising expenses accounted for 74% of the operating revenue during the year under review. In fact, slice launched several new advertising campaigns targeted towards GenZ in FY22. It also rolled out an ad campaign for the 2022 session of Indian Premier League (IPL). 

Meanwhile, slice’s total expenses rose to INR 542.5 Cr from INR 168 Cr in FY21. Employee benefit expenses tripled to INR 98.9 Cr from INR 32.8 Cr in FY21. Of this, it spent INR 86.1 Cr towards salaries and wages and INR 8.3 Cr towards employee share-based payments.

 

The startup’s finance cost also grew to INR 65.1 Cr in FY22 from INR 7.6 Cr in FY21. Total impairment cost surged ninefold YoY to INR 60.8 Cr.

slice received a major blow in June last year after the Reserve Bank of India (RBI) barred NBFCs from offering credit on PPI. Consequently, the unicorn shut down its vertical offering prepaid credit cards. Amid the confusion around its business model following the RBI’s action, slice hived off its payments and credit businesses into two separate verticals. 

Earlier this month, reports emerged about slice acquiring a 5% stake in Guwahati-based North East Small Finance Bank for $3.42 Mn (INR 28 Cr). 

While India’s fintech market is expected to reach a size of $2.1 Tn by 2030, growing at a CAGR of 18% from 2022, mounting losses continue to pose a major challenge for the startups in the sector. Fintech unicorn OneCard’s net loss widened over 5.5X to INR 183 Cr in FY22, while BNPL startup ZestMoney’s loss grew 3X to INR 399 Cr during the same year.

Meanwhile, reports emerged on Thursday that PhonePe has cancelled its plan to acquire ZestMoney.