Fintech platform CRED saw its total revenue surge by 66% to Rs 2,473 crore in FY24 from Rs 1,484 crore in FY23 while operating losses narrowed by 41% to Rs 609 crore from 1,024 crore.
According to CEO Kunal Shah, CRED is also reaping the benefits of what the tech world calls “operating leverage” when it comes to cutting losses. This means that CRED is scaling its revenue without a proportionate increase in costs.
“What happens is when, when revenues start picking up, you’re not necessarily adding more, let’s say, headcount, or you’re not necessarily having to spend the same amount of marketing dollars to acquire customers,” Shah explained.
“We focused in the early years to build engagement products. The monetisation product journey is more recent one, and fortunately, these customers monetize quite well in financial services. It’s just that we haven’t launched many products, and we will see in the subsequent quarters announcements coming on products that will kind of help accelerating monetisation, as well as make it easy for our members to interact with good financial products with extraordinary experience,” Shah added.
CRED is deriving more revenue from older users, and also rapidly adding newer paying users, as a result its contribution margin has grown 20X this year, the company said.
Member engagement has deepened, CRED said, with 35% of users interacting with three or more of its products, while 90% redeemed rewards monthly. As a result, monetised members grew by 58%, contributing to higher contribution margins and a 41% reduction in operating losses.
CRED’s user base grew significantly, with a large portion of customer acquisition coming from organic channels. Over 75% of its new users were acquired organically, which helped reduce customer acquisition costs (CAC) by 40%. According to the company, It was not a year it spent big on advertising.
The adoption of CRED Pay across online merchants also saw a substantial increase, resulting in a 254% boost in transaction volumes over the year.
This wide range of payment use cases led to a 22% rise in sessions per monthly transacting user (MTU) and higher overall engagement. Additionally, the platform’s Total Payment Value (TPV) climbed 55%, reaching Rs 6.87 lakh crore.
While CRED’s most revenues comes from financial products like payments, credit and insurance, its new product Cred Garage has also gained significant traction. 4.2 million vehicles parked on CRED garage in FY23-24 for challan and pollution certificate checks, FASTag recharges, and insurance renewals.
Shah is also betting big on its newest wealth tech offering Cred Money. “Our intent for money was again to make it very easy to have good financial behavior and be more responsible with all things money…. it’s early to talk about numbers, but fairly confident that will become one of most powerful products in coming days and weeks.”
“We try to do, let’s say one product every quarter, or one major product every two quarters. So we will see some of that. We have made ourselves very clear on types of products that we will inform focus on philosophically and not focus on philosophically,” Kunal Shah explained in a press meet.
While it plans to increase more and more products in the coming years, CRED aims to take a cautious approach towards expanding its workforce. Average revenue per user is a key metric that cred aims to focus on when it comes to expanding headcount.
“In the evolved markets where tech companies have existed for decades, revenue per employee is a very good metric that one can see what kind of leverage companies are creating. India has not started in that zone yet, but very soon, we foresee that a lot of the analyst, or even India will start focusing on this topic a lot more. Because that really tells you if you really are a tech company or not? Because if you have to keep adding head down to grow revenue, then you are not really in a tech leverage business,” Kunal shah added.
The company is also not planning to raise capital in the coming year. “When companies perform well, access to capital naturally becomes easier. However, we’re sufficiently funded and aren’t actively seeking additional capital at this time. We’ve been fortunate to have strong, supportive investors on our cap table who have backed us throughout our journey and decision-making process,” Shah explained.
On February 6, CRED announced the acquisition of the online financial planning and investment platform Kuvera, in a mix of cash and stock deals. Shah said that the company is still figuring out how to build products on Kuvera’s offerings which mostly include mutual funds and fixed deposits.
“What we can tell you is that we are going to be probably the most boring but reliable wealth product out there, and discourage any kind of speculative behavior that is likely to cause losses, and focus on that as a segment of business that we want to build on and keep doing more,” Kunal Shah explained.
“We are focusing on categories that are likely to not promise to get you rich very fast” Shah added.
