Serial entrepreneur Kunal Shah’s Cred grew its revenue rapidly in the financial year ended March 2023 as the fintech startup sought to improve monetisation by offering more products, but it spent almost twice as much to gain scale.
The Tiger Global-backed unicorn, last valued at about $6.4 billion, increased its total revenue from operations to Rs 1,400.6 crore in FY23 from Rs 393.6 crore the previous year. However, its total expenses jumped 66% to Rs 2,832 crore. This effectively means Cred spent Rs 2 to generate one rupee in revenue during the year.
As a result, the company’s losses widened to Rs 1,347.4 crore for FY23, about 5% more than the year before.
Still, the rapid rise in revenue and the relatively slower increase in expenses helped Cred to reduce the cost-to-revenue ratio from FY22, when it spent Rs 4.3 to make one rupee of revenue.
In an interview last February, Shah spoke about being more reasonable in its marketing spends, a major cost area for the firm. Indeed, the company cut its marketing and business promotion expenses by 27% to Rs 713 crore in FY23, while also reducing its customer acquisition cost.
“We strengthened the platform with more touchpoints for members to engage with Cred at a higher frequency in FY23. This resulted in significantly higher engagement that created monetization opportunities while reducing the cost of attracting and serving members,” the company said in a statement.
The firm, which also counts Singapore sovereign wealth GIC, Falcon Edge and Dragoneer among its investors, said its monthly transacting users grew by over 58% during FY23.
Founded in 2018, Bengaluru-based Cred started as an app that lets users pay credit card bills and rewards them in the form of “Cred” coins, which can be redeemed across many partner businesses. Since then, the firm has diversified into lending and e-commerce among other offerings.
The company now also offers other bill payments including electricity and water bills through its app. Last week, it started ‘CRED Garage’, a personal vehicle management offering that provides priority concierge services.
In the last financial year, the company acquired lending-focused big data company CreditVidya. It also bought a minority stake in its Mumbai-based lending partner LiquiLoans. The previous year, it acquired expense management startup Happay in December and liquor delivery startup HipBar Pvt. Ltd in October.
“Our focus remains on rewarding the creditworthy with more products that improve their lives and lifestyles,” Shah said in a statement.
