Cred’s Cost Efficiency: Revenue Jumps Up 255% But Losses Increase Just 5.3% in FY23

For every one rupee of operating revenue generated during the financial year 2023, CRED spent ₹2.02! The message is clear; Cred is now spending less to bring every dollar to the company signaling financial efficiency and growth optimization.


The fintech unicorn Cred has unveiled its financial results for fiscal 2023, concluding on March 31, 2023. In a remarkable display of growth, Cred revenue from operations reached an all-time high of Rs 1,400.6 crore in FY23, with an astonishing 255.9% YoY growth. The company’s performance in the last two years makes this achievement even more impressive. Cred’s annual revenue for FY23 surged over 16x from a modest Rs 88.6 crore in FY21.

Under the leadership of its founder, Kunal Shah, Cred demonstrated its ability to maintain a relatively controlled stance on annual losses. In FY23, the company reported a mere 5.3% YoY increase in losses, amounting to Rs 1,347 crore, compared to the previous fiscal year when losses stood at Rs 1,279.5 crore. The message is clear; Cred is now spending less to bring every dollar to the company.

It’s worth noting that if we exclude the ESOP (Employee Stock Ownership Plan) cost of Rs 300 crore from losses for FY23, the total losses would decrease accordingly.

However, a closer look reveals that Cred’s losses for FY23 have multiplied more than 2.5 times from just Rs 523.85 crore in FY21 and more than 3.7 times from Rs 361.11 crore in FY20. This indicates the strategic measures the fintech major has employed in recent years to effectively narrow its annual losses.

“Our focus on rewarding good behaviour strengthened growth momentum in FY23, with new products and features contributing to higher engagement with members. We will continue the momentum to get close to overall profitability and meaningful revenue scale,” said Kunal Shah, founder of Cred.

We delve into the company’s financial journey to gain a deeper understanding of Cred’s financial performance and how it strategically managed its expenses to narrow its losses in recent years.

CRED Expenses FY23

Cred’s overall expenses increased a notable 66.4% YoY in FY23, amounting to Rs 2,832 crore. To put this in perspective, for every one rupee of operating revenue generated during the last financial year, the company spent ₹2.02. This ratio offers valuable insights into the cost efficiency of Cred’s operations.

Here’s a breakdown of Cred’s expenses in FY23:

  • Cred’s employee benefits swelled 156.4% YoY in FY23 to Rs 788.9 crore. These expenses accounted for 27.9% of the overall expenditure during the last fiscal year. It’s worth noting that this figure also includes Rs 300 crore attributed to ESOP costs, which are non-cash expenses.
  • Cred implemented a significant cost-saving strategy by reducing its marketing and business promotion expenses during the fiscal year 2023. These expenses declined 26.9% YoY, from Rs 975.7 crore in FY22 to Rs 713.4 crore in FY23. Notably, marketing expenses accounted for 25.2% of the company’s total expenses for the year.
  • Cred’s achievement in cost management extends to its customer acquisition efforts. The company has successfully slashed its customer acquisition cost by approximately 80% over the course of the past four years. This remarkable reduction indicates a strategic refinement in how the fintech company acquires and retains its user base, showcasing its commitment to efficiency and sustainable growth.

Cred’s financial expertise shines through as the company has efficiently managed its funds, maintaining a substantial cash reserve of approximately Rs 2,050 crore.

Other Highlights

A significant source of revenue and profitability for Cred is its lending division, Cred Cash, which has disbursed loans valued at around Rs 12,000 crore, according to the sources. Nearly 90% of the company’s revenues are generated by Cred Cash, utility bill payments, and Cred Max, which offers insurance services.

It’s important to note that revenue from credit card bill payments primarily serves as a strategy for Cred to attract premium customers, especially considering that approximately one-third of these payments are now facilitated through popular UPI apps.

Cred currently boasts an impressive user base of around 12 million. However, in the broader context of India’s fintech landscape, it’s noteworthy that India boasts an estimated 40 million unique credit card customers, and the issuance of credit cards in the country recently exceeded 100 million.

Notably, many affluent customers in India opt for multiple credit cards, underscoring the substantial market potential within the fintech sector.

Cred also shared valuable insights into the behaviour of its average monthly transacting user (MTU), revealing that these users engage in approximately 20 sessions on the platform each month. These sessions encompass a wide range of activities, including credit card bill payments, utility bill payments, travel bookings, shopping, money transfers, and merchant transactions via UPI.

Cred not only recorded a remarkable growth of over 58% in its monthly transacting users but also solidified its position as a leading player in the fintech industry by capturing one-third of credit card bill payments by value on its platform. In a statement, the company highlighted that FY23 witnessed an impressive 77% surge in total payment value (TPV), from Rs 2.5 lakh crore in FY22 to Rs 4.4 lakh crore in FY23.

The Bengaluru-based Cred attained a valuation of $6.4 billion after raising $140 million in June 2022.

An avid industry analyst passionate about Mobile, Technology and Entrepreneurship. A internholic user can be found by "amit6060" on social networks.


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