SUMMARY
The median remuneration of the 23 founders of 15 fintech soonicorns stood at INR 1.32 Cr in FY22, while they received an average salary hike of 27% compared to FY21
At INR 2.9 Cr, MoneyView cofounders Puneet Agarwal and Sanjay Aggarwal earned the highest salary among founders of fintech soonicorns
Niyo’s Vinay Bagri and Virendra Bisht and Khatabook’s Ravish Naresh did not get any salary hike and earned the same in FY22 as they did in FY21
Last week, we published a detailed analysis on the salaries of CEOs and founders of India’s fintech unicorns in the financial year 2021-22 (FY22). As promised, we are back with an analysis of the remuneration that the founders of fintech soonicorn startups of the country received in FY22.
While there are a total of 34 fintech soonicorns, only 15 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 remunerations of founders or there’s an ambiguity in the annual remunerations shown.
The 15 fintech soonicorns have 23 founders who together earned INR 31.2 Cr in remuneration in FY22. It must be noted that only two out of these 15 soonicorns were profitable during the year under review – MoneyView and Kissht. While the founders of these profitable startups earned INR 7.76 Cr in cumulative salaries in FY22, the founders of remaining loss-making startups together received salaries of INR 23.44 Cr.
The median remuneration of the 23 founders stood at INR 1.32 Cr, while they received an average salary hike of 27% year-on-year (YoY) in FY22. In comparison, these founders collectively earned INR 24.5 Cr in FY21 with a median remuneration of INR 88 Lakh.
Earlier in our analyses, we found out that Nikhil and Nithin Kamath, the founders of profitable bootstrapped unicorn Zerodha, earned INR 48 Cr each in FY22, while Physicswallah’s Alakh Pandey received the highest salary of INR 9.6 Cr among edtech founders. This trend of founders of profitables startups earning more than their peers was seen in fintech soonicorns as well.
At INR 2.9 Cr each, Puneet Agarwal and Sanjay Aggarwal, the founders of lendingtech startup MoneyView, which turned profitable in FY22, earned the highest salary among founders of fintech soonicorns. Despite this, the remuneration earned by them was over 6% lower than in FY21.
On the other hand, Cashfree Payments, which slipped into the red in FY22 after posting a profit of INR 25.2 Cr in FY21, gave its cofounders a hike of over 100%. While Reeju Datta received a salary hike of 108.7% YoY to INR 1.9 Cr in FY22, Akash Sinha received a hike of 101% to INR 1.83 Cr.
Meanwhile, Niyo’s Vinay Bagri and Virendra Bisht and Khatabook’s Ravish Naresh did not receive any salary hike and earned the same amount in FY22 as they did in FY21. On the other hand, founders of KreditBee saw their annual remuneration drop by a considerable amount in FY22. While Karthikeyan Krishnaswamy saw his salary decline by almost 13% YoY to INR 67 Lakh in FY22, Madhusudan Ekambaram’s salary nosedived by 32.7% to INR 76 Lakh from INR 1.13 Cr in FY21.
Fintech Soonicorns Vs Unicorns
As per our analysis of salaries of fintech unicorns, the 25 founders of nine fintech startups took home INR 133 Cr in total salary in FY22. While Mobikwik’s Bipin Preet Singh and Upasana Taku got the biggest hike (174.8%) among fintech unicorn founders, Lendingkart’s Harshvardhan Lunia was at the top among soonicorn founders with a salary hike of 161.3% to INR 2.3 Cr in FY22.
While the average hike received by fintech unicorn founders stood at 40% in FY22, it was at 27% for fintech soonicorn founders.
The median salary of the founders of the nine unicorns in FY22 stood at INR 1.5 Cr, while the corresponding number was at INR 1.32 Cr for founders of 15 soonicorns.
In comparison, founders of top eight edtech startups collectively earned a salary of INR 27.5 Cr in FY22 and received an average salary hike of 46% from FY21. The median remuneration of the edtech founders stood at INR 1.13 Cr in FY22.
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.
What’s Ahead For Fintech Startups?
India’s fintech sector continues to provide ample opportunities to investors and startups. As per an Inc42 report, the fintech sector has the potential to reach a market size of $2.1 Tn by 2030. The opportunities available in various subsectors of fintech – from insuretech to lendingtech to neobanking – means that raising capital hasn’t been as big a challenge for fintech startups as it is for startups in other sectors.
Fintech startups raised a total funding of $1.2 Bn in the first three months of 2023, almost 40% of the $3 Bn raised by the Indian startup ecosystem during the quarter. However, it must be noted that of the $1.2 Bn collectively raised by the fintech sector, almost half was mopped up by Walmart-backed PhonePe at a record $12 Bn valuation.
Despite this, like all other sectors, the fintech sector has also been affected by the ongoing funding winter that commenced in 2022. Amid this, fintech startups, like edtech and other sectors, have also resorted to firing employees to cut costs and increase their runway.
Earlier this week, neobanking unicorn Open laid off 47 employees while BNPL startup Simpl fired 150 employees. As per Inc42’s layoff tracker, a total of 16 Indian fintech startups have laid off around 1,400 employees since 2022.
While the fintech sector continues to be the top pick of investors, the startups in the sector are struggling to control their mounting losses. The cumulative loss of the 13 loss-making fintech soonicorns considered for this analysis stood at INR 1,920.8 Cr in FY22. Exorbitant spending on advertising and promotional activities and hiring talent is one of the primary reasons for these startups posting losses.
As per a recent Inc42 analysis, 28 Indian fintech startups, including 13 unicorns and 15 soonicorns, spent a whopping INR 5,495.16 Cr (around $671.96 Mn) in FY22 on advertising, promotions and other marketing activities. On an average, these fintech startups spent INR 196.26 Cr ($23.9 Mn) on promotional activities during the year.
While growth-at-all-cost was the mantra for fintech startups till FY22, the focus has turned to sustainable growth and profitability in FY23. While fintech startups have laid off employees and cut marketing costs in a bid to turn profitable, it remains to be seen if this translates to improvements in their bottom line in FY23. Besides, all eyes would also be on salaries of the founders of fintech startups in FY23 to see if the cost-cutting measures also resulted in any major declines there.
