Fintech startup Cashfree Payments' FY23 losses climb 4,333% to Rs 133Cr

Cashfree, a payment gateway and services provider, has reported a significant revenue increase in the fiscal year 2023 (FY23). The company's revenue from operations rose by 75% to Rs 614 crore.

However, this fiscal year also saw a substantial increase in losses, which swelled to Rs 133 crore, a stark contrast to the Rs 3 crore loss reported in the previous year.

Escalating expenses impacting profitability

The company's total expenses more than doubled, reaching Rs 750 crore. A major factor contributing to this increase was the jump in employee costs, which escalated from Rs 96 crore in the previous fiscal year to Rs 198 crore in FY23.

Regulatory challenges 

Cashfree faced regulatory challenges when the Reserve Bank of India (RBI) imposed a nearly year-long ban in 2023 on payment aggregators like Cashfree from onboarding new merchants, which compelled the startup to explore alternative revenue sources. 

In February of the previous year, Cashfree acquired Zecpe, a one-click checkout company, aiming to enhance the shopping experience for direct-to-consumer (D2C) brand partners.

Financial performance 

Cashfree's primary revenue source has been the commission charged from merchants for using its payment infrastructure. This commission saw a 75% increase, contributing significantly to the Rs 614 crore revenue.

The startup also earned Rs 50 lakh from setup fees and payment gateway processing charges, which accounted for 59% of total expenditure, more than doubled to Rs 446 crore.

Recently, Cashfree received the final license for a payment aggregator from the RBI, allowing it to onboard new merchants. This can positively impact the company's revenue in the ongoing financial year. It claims to have prepared 8,000 merchants, who have completed their KYC formalities, to go live on the platform.

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