CRED clocks a Revenue of INR 422 Cr; Spending 4 times the revenue in FY 22:

CRED becomes Unicorn

CRED is a fin-tech company founded by Kunal Shah in the year 2018. The company has its headquarters in Bangalore. The company generates revenue from facilitating rental transactions, interest income on the p2p loans facilitated by lending partners, processing fees from servicing of loans and sale of advertising space, and listing fees. 

 It also acts as a technology platform to distribute coupons and vouchers of different brands, aggregate credit card payment options, and allow rental payments and merchant transactions via credit cards. The company has successfully built a user base of 11.2 million by FY22.

The company’s revenue from operations for FY22 was INR 393.6 crores. At the same time, the company has also earned INR 29 crores as non-operating income taking its total revenue for FY22 to INR 422.6 crores. 

The company has spent a massive amount of INR 975.8 crores on marketing and promotional activities. Most of this expenditure can be attributed to its marketing efforts during IPL.

To keep up with the growth of the business, they hired new employees which took high expenditure on employee benefits. They incurred a cost of INR 307.6 crores on employee benefits, which also includes a cost of INR 112.5 crores on ESOPs. 

The company incurred an expenditure of INR 158.6 crores on payment processing, payment gateway expenses, and a few direct expenses during FY22. 

During the same period, they had incurred an expenditure of INR 137 crores on IT and communication expense. And, they spent INR 87.5 crores on legal & professional costs. The legal costs can be attributed to the acquisitions of HipBar and Happay made by the company during FY22.

With these expenses, the total expenditure of the company for FY22 was INR 1702 crores.

As a result, the company finished its business operations for FY22 with an overall loss of INR 1279.6 crores. The outstanding losses of the company at the end of FY22 were INR 2225 crores.

According to the financial analysis, the financial metrics EBITDA margin and ROCE were at -298.80% and -42.65% respectively. It has been observed that the firm has spent INR 4.3 to generate INR 1 as operating income in FY22.

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