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Cred FY21 losses widen as marketing spends grow manifold
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Credit card payment platform Cred, owned and operated by Dreamplug Technologies Pvt Ltd, reported a 45% increase in its net loss for 2020-21 (FY21) as the company’s marketing expenses soared manifold during the year, according to an official document shared by the company. 

Cred’s net loss widened to Rs 524 crore for FY21 from Rs 360 crore a year earlier, the document showed. 

During the year, the company spent Rs 222 crore on marketing, against Rs 57 crore in 2019-20 (FY20). However, the company’s revenue from operations grew exponentially to Rs 88 crore from Rs 52 lakhs a year earlier, taking Cred’s total income to Rs 95.53 crore for FY21 from Rs 18.16 crore for FY20. 

Cred said that its focus on products across financial services and commerce led to an increase in revenue. Cred also said that its total userbase grew to 7.5 million in 2021 and claimed that the company facilitates over 25% of credit card bill payments. 

Cred’s employee benefits costs almost doubled to Rs 83 crore for FY21 from Rs 42 crore a year earlier as the company added almost 150 employees, taking the total employee headcount to 383. 

During the year, the credit card payment company spent Rs 44 crore on share-based payments to employees against Rs 27 crore a year earlier, by granting 37,490 employee stock options. Cred also said that the company nearly doubled its spends on staff welfare to Rs 3.5 crore for FY21, to support its employees for work from home migration and other Covid-19-related issues. 

Cred had recently expanded its employee stock option plan to $500 million, VCCircle had reported, citing regulatory filings.  

In November last year, Cred had said that the company’s cumulative buyback for the year would be worth Rs 100 crore. In December 2021, the company said that it will buy Happay in a cash and stock deal for about $180 million, and will also expand its ESOP pool to all of Happay’s 230 employees. 

The regulatory filings showed that the company had also raised a little over $250 million at a valuation of almost $4 billion, led by Tiger Global Management and Falcon Edge Capital.   

Cred’s robust revenue growth for FY21 is in line with many fintech companies that saw their businesses surging manifold during the year, thanks to the rapid adoption and deeper penetration of digitization in the country due to Covid-19-induced restrictions on movements of people and businesses.

Just as Cred, many fintech services firms have also diversified their businesses to include more services in a bid to generate more revenue.  

Cred is also said to have started the procedure for applying for an account aggregator license, the Economic Times reported citing regulatory filings. Account aggregator is a financial data-sharing system that gives consumers greater access and control over their financial records while expanding the potential pool of customers for lenders and fintech companies, according to the press information bureau (PIB) of India website. 

Founded by former Freecharge founder Kunal Shah in 2018, Cred is a members-only app that lets users pay credit card bills and rewards them in the form of credit coins, which can be redeemed across many partner businesses. The company also counts DST Global and Sequoia Capital as its backers.   

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