CRED's revenue skyrockets 250% year-on-year but losses remain a concern
Fintech giant CRED has reported a whopping 256% increase in revenue from operations, hitting Rs. 1,400 crore in FY23, up from Rs. 393 crore in FY22. However, the company's losses also grew by 5%, rising from Rs. 1,280 crore in FY22 to Rs. 1,347 crore in FY23. CRED attributes its success to new products and features that have boosted member engagement and slashed customer acquisition costs by around 80% over the past four years.
Marketing expenses decrease as expenses grow
CRED's marketing expenses dropped by 27%, falling from Rs. 976 crore in FY22 to Rs. 713 crore in FY23. Despite this decrease, the company's overall expenses surged by 66%, reaching Rs. 2,832 crore in FY23 compared to Rs. 1,702 crore in FY22. With cash reserves of about Rs. 2,050 crore, CRED's current cash runway is projected to last for the next three years if losses persist at their current pace.
Rising user base and engagement on CRED platform
CRED's average monthly transacting user (MTU) participates in roughly 20 sessions, including credit card bill payments, utility bill payments, shopping, travel packages, money transfers, and merchant transactions via UPI. Launched by Kunal Shah in 2018 and valued at over $6 billion (Rs. 49,936 crore) last year, CRED now boasts around 12 million users. The number of credit cards issued in India recently exceeded 100 million, with most affluent customers using multiple cards.
CRED Cash: a major revenue driver
CRED Cash, the company's lending arm, is one of its primary revenue drivers and profit engines. It has disbursed about Rs. 12,000 crore worth of loans, with nearly 90% of its revenues stemming from CRED Cash, utility bill payments, and insurance services through CRED Max. Credit card bill payments don't generate revenue for CRED directly but serve as a means to attract premium customers.
Expanding UPI payments and entering vehicle management
CRED has been concentrating on expanding its UPI payments game, raising its market share in UPI transactions from 0.3% last October to 0.8% this year. The company anticipates credit on UPI to grow rapidly over the next few years. Last month, CRED entered the vehicle management business segment to further broaden its revenue. The company now offers CRED Garage, an all-in-one vehicle management platform within its mobile app.
