Dreamplug Technologies, which operates fintech firm Cred, saw its losses jump around 2.5X, from 524 crore in FY21 to1,280 crore in FY22, because of rising marketing expenses, higher payment processing charges and increased employee-related spends, according to financials shared by the company.
Cred’s marketing and promotional expenses, which totalled to Rs 976 crore in FY22, jumped over 200% from Rs 324 crore in FY21, as it ran campaigns during the Indian Premier League (IPL) and roped in celebrities. The company also spent Rs 308 crore on employee benefits, which was about 128% higher over FY21. Cred’s payment processing charges and other direct costs jumped 174%, from Rs 58 crore in FY21 to Rs 159 crore in FY22. In all, the Bengaluru-based startup’s total expenses reached Rs 1,702 crore in FY22, about 175% higher compared with Rs 619 crore it spent in FY21.
The company’s revenue from operations in FY22 stood at Rs 394 crore, growing nearly 4.5X from Rs 89 crore in FY21, helped by an increase in its member base which climbed 50% year-on-year to 11.2 million in FY22.
The company did not provide any guidance on how it has been performing in the current fiscal. It, however, did signal that it wouldn’t turn profitable in FY23. “We are not thinking about it (profitability) now… Cred is focussed on investments in marketing, brand building and expanding the total member base,” Miten Sampat at Cred told FE. Cred, which has raised over $1 billion from Sequoia, Tiger Global, Singapore’s GIC, DST Global and others, is valued at $6.4 billion.
The company targets the top 30-40 million households in India, which Cred thinks are the ‘high credit worthy’ ones. That base used be around 20-25 million a few years ago and was expanding further, the Kunal Shah-led company said as it ruled out any fears of the market saturating.