Founders & CEOs Of 13 Fintech Unicorns Took Home INR 133 Cr In FY22

From a hot favourite of venture capital (VC) firms to a key enabler of the Indian government’s digital payments and financial inclusion initiatives, fintech has emerged as one of the most promising sectors in the Indian startup ecosystem over the last few years. 

While the valuations of fintech startups continue to soar and they keep on getting funding, most of these startups continue to report heavy losses. As per an Inc42 report, 40 out of the 48 fintech unicorns and soonicorns posted losses in the financial year 2021-22 (FY22).

However, the mounting losses have not stopped the startups from spending aggressively on advertising and promotional activities or for hiring talent. According to an Inc42 analysis, founders and CEOs of 13 fintech unicorns collectively earned a salary of INR 133 Cr in FY22.

Importantly, nine out of these 13 startups were in losses. The loss making startups cumulatively paid INR 30.3 Cr to 18 founders and CEOs in salary during the year, while four profitable startups – Zerodha, Oxyzo, BillDesk, and Razorpay – paid their founders a cumulative INR 102.6 Cr in remuneration in FY22.

It must be noted that only 13 out of the 22 fintech unicorns were considered for this analysis as the remaining ones have not filed their financial statements with the Ministry of Corporate Affairs or not disclosed the annual remuneration of founders. 

Coming back to the analysis, the median salary of the founders of the nine unicorns stood at INR 1.5 Cr in FY22 while they received an average salary hike of 40% from FY21. Excluding Zerodha, the median remuneration of the founders of the remaining 12 fintech startups stood at INR 1.4 Cr in FY22.

In comparison, the median salary of 28 founders of 16 fintech unicorns stood at INR 99 Lakh in FY21, while they cumulatively earned INR 102 Cr.

Bootstrapped unicorn Zerodha’s founders Nithin and Nikhil Kamath got INR 48 Cr each as salary in FY22, making them the highest paid fintech founders on the list. Both the brothers also received an additional INR 24 Cr each as bonus.

The remuneration of the Kamath brothers increased 33% from FY21. The combined salaries, including bonuses, of Zerodha founders accounted for 72% of the combined salaries of all the founders on the list.

However, it must be noted that the investment tech unicorn is one of the few profitable unicorns. Its net profit surged 86.6% year-on-year (YoY) to INR 2,094.3 Cr in FY22, while operating revenue rose 81.8% to INR 4,963.7 Cr. 

On the other hand, publicly listed and loss-making Paytm’s Vijay Shekhar Sharma received a remuneration of INR 3.7 Cr in FY22. He also got a perquisite of INR 28.6 Lakh. Though Paytm reported a revenue of INR 5,264.3 Cr in FY22, its loss soared to INR 2,396.4 Cr. Not to forget, its valuation also tanked in the public market. 

In comparison, Sharma earned a remuneration of INR 3.4 Cr in FY21, when the company’s revenue stood at INR 3,186.8 Cr and loss at INR 1,701 Cr. 

Among the founders who took the lowest salaries were CRED’s Kunal Shah, Oxyzo’s Ruchi Kalra and BharatPe’s Shashvat Nakrani. While Shah had an annual remuneration of INR 2.9 Lakh in FY22, Kalra and Nakrani’s salaries stood at INR 24 Lakh and INR 29 Lakh, respectively.

It must be highlighted that the above remunerations are the figures disclosed by the companies and may not be the only source of earnings for the founders. It is likely that some founders would have made money through secondary sales or companies might have taken care of some expenses of the founders. 

Fintech Vs Edtech: Which Founders Are Earning More?

As per a recent analysis of salaries of edtech founders, the top bosses of eight popular edtech giants together earned INR 27.5 Cr in FY22 and received an average salary hike of 46% from FY21. The median remuneration of these edtech founders stood at INR 1.13 Cr in FY22. 

Like in the fintech sector, the founder of a profitable startup received the highest salary in the edtech sector. Physicswallah’s Alakh Pandey received the highest salary of INR 9.6 Cr. 

While the lowest salary earned by a founder of a top fintech startup was Shah’s INR 2.9 Lakh, Adda247’s Anil Nagar and Saurabh Bansal earned the lowest among edtech founders with a gross salary of INR 42 Lakh in FY22. 

It must be noted that unlike the fintech sector, the edtech sector has been witnessing a sharp slowdown in the business since the return of normalcy to daily life post the pandemic-led disruption. Besides, the inability of the edtech startups to raise funding amid the ongoing funding winter has forced them to layoff employees to cut costs. 

As per Inc42’s Top 200 financial Index report, only one out of the 10 edtech unicorn and soonicorn startups was profitable in FY22.

The Path Ahead For Fintech Startups 

Rising internet and smartphone penetration, deepening financial inclusion, increasing per capita income and venture capital inflow provide a big opportunity for India’s fintech startups. India’s fintech market is expected to grow at a CAGR of 18% to reach a size of $2.1 Tn by 2030 from $584 Bn in 2022.

While the startups in the sector raised $2.2 Bn in 2020, the first year of pandemic, the capital infusion jumped 263% to $8.8 Bn in 2021. Even amidst the funding slowdown in 2022, fintech startups managed to bag funding of $4.8 Bn whereas edtech startups could only raise $2.4 Bn during the year. 

However, it’s not that everything is hunky dory with the fintech sector. As the Reserve Bank of India (RBI) continues to come out with new guidelines to better regulate the space, some of its orders have raised questions on the business models of fintech startups. 

The RBI’s announcement last year that non-bank prepaid payment instruments (PPI) issuers cannot load the instruments with credit lines sent startups like EarlySalary, Slice, KreditBee, Jupiter into a tizzy. While these startups halted onboarding new customers initially, eventually they all pivoted their business models. 

More recently, SBM Bank blocked all commercial credit cards it was offering in association with several fintech startups on the RBI’s directions on KYC. Startups such as Happay, EnKash Card, Kodo, RazorpayX, Open card, Velocity, and OneCard were impacted due to this. 

Besides, fintech startups have also been under the radar of the government and investigative agencies for various reasons.

As such, fintech startups need to remain in continuous dialogue with the government, regulator, and follow the rules in the highly-regulated industry. As far as the salaries of the founders are concerned, it remains to be seen if the ongoing macroeconomic headwinds, layoffs, and correction in valuation also result in big revisions in their remunerations.

Stay tuned for our next article on the salaries of founders of fintech soonicorns.