Kunal Shah’s Newtap Finance Posts INR 5.6 Cr Profit In First Year Of Operations

Newtap Finance, a non-banking finance company (NBFC) founded by Cred founder Kunal Shah, posted a net profit of INR 5.63 Cr in the financial year 2022-23 (FY23), the first year of its operations.

As per its regulatory filing with the Ministry of Corporate Affairs, Newtap Finance’s revenue from operations stood at INR 15.53 Cr during the year ended March 2023, while its total revenue stood at INR 17.06 Cr.

On the expenditure front, total expenses stood at INR 9.27 Cr. At INR 5.15 Cr, finance costs accounted for the biggest portion of expenses, while Newtap Finance’s employee benefits expenses stood at INR 1.35 Cr in FY23.

According to the filing, Newtap Finance had a loan book of INR 273 Cr, built primarily through CRED, at the end of the year.

Newtap offers short-term personal loans to CRED users via the fintech giant’s buy-now-pay-later (BNPL) offering, CRED Flash. Currently, CRED Flash is only available to select CRED users within the CRED store and at some large ecommerce portals where CRED is integrated as a checkout option.

The Kunal Shah-led fintech giant has already helped its partner lenders create a loan book of around INR 10,000 Cr through CRED Cash. 

Newtap Finance, previously known as Parfait Finance, was acquired by Newtap Technologies in 2021. The new entity was rebranded as Newtap Finance and started operations in the last financial year.

While the NBFC has not received any ratings from rating agencies, it would be able to source debt funding from banks and larger NBFCs once it’s rated.

Newtap Finance is currently looking for a CEO and will set up a fresh management team to operate as a full-service NBFC, ET reported citing a source. It is also looking to establish itself as a standalone lending platform to work with lenders beyond CRED.

“They will even help other fintechs process loans in a compliant manner by sharing the platform they have built,” the report quoted a source as saying. The NBFC will also look to raise equity and debt capital independently, the publication added. Earlier, media reports suggested that Newtap Finance will look to raise around $50-70 Mn.

To bolster its lending vertical, CRED also acquired lending SaaS startup CreditVidya in November 2022, which operates Prefr, a digital lending platform that has developed underwriting and risk assessment models crucial for a lending product.

CreditVidya’s acquisition gave CRED access to a second NBFC alongside Newtap. The fintech unicorn also made investments in lending tech startups Liquiloans and CredAvenue last year before launching CRED Cash.