Kunal Shah’s credit card payment app, CRED, finally seems to have found a revenue stream that worked for them in FY21. The company, which has managed to divide the world among those who think that Shah is about to be a game-changer and those who cannot swallow his high valuations, had projected staggering growth in operating income for the past fiscal year.

According to the documents submitted with its regulatory filings, CRED has planned a 208X growing its operating income to Rs 108 crore in the fiscal year ending March 2021.

In particular, these figures are not taken from the audited statements since the fiscal year has just ended, but rather from projections based on the provisional financial statements for the first two quarters of fiscal year 21.

If the company comes close to these numbers it would be a huge improvement in terms of revenue as the company reported operating income of only Rs 52 lakh in fiscal year 20. These numbers have sparked huge discussions in the ecosystem, as people struggle to swallow the high valuations the company has managed from long-time investors.

Although CRED did not respond to EntrackrQuestioning the company on the projected numbers, it appears that the lending industry has performed well for the company in fiscal years 20-21.

At the start of FY21, CRED had deployed two credit products: CRED RentPay and CRED Cash (formerly CRED Stash). The former allows users to pay recurring household expenses and bills, and monthly rent payments using credit cards, while the latter offers an instant low-interest line of credit.

Between September and February, CRED had disbursed more than Rs 1000 crore in loans to its users, according to a report by The Morning Context. Launched as a short term loan product, CRED Cash evolved into a personal loan product where borrowers could repay loans based on one month to four years.

According to industry estimates, CRED receives between 1 and 2% commission from its lending partner IDFC Bank on each loan disbursement. Besides loans, the company also earns money through partnerships with brands.

To her credit, the company didn’t fall for the easy way to show raw transaction values ​​to show traction, which could easily inflate the numbers for her. Whether in terms of goods sold through the platform or loans aggregated here. Shah clearly didn’t need to do this thanks to the trust he enjoys from his investors, past and present.

What the company has achieved is a significant penetration of the highest level of credit card users in the country, with between 20% and 30% of them using the app to offset their outstandings, thanks to the gamification that the application has performed there.

In FY21, CRED also launched two subsidiaries Dreamplug Advisory Solutions and Dreamplug AA Tech Solutions to foray into investment advice and account aggregation. It is not known how these two subsidiaries helped the company generate income.

Unlike exceptional growth in operating income, operating expenses are expected to increase by around 79% to Rs 677 crore in FY21 from Rs 378.4 crore in FY20. Annual losses are projected to be around Rs 562 crore in FY21, increasing by 55% from the Rs 363.2 crore lost in FY20.

Following the two-year trend, marketing is expected to be the company’s primary cost center, accounting for nearly 61% of operating expenses. It is estimated that these costs will increase by 130% to almost Rs 410 crore in the previous fiscal year.

High customer acquisition costs were already expected as the company aggressively advertised on TV and digital channels.

So far, CRED has raised over $ 230 million in total funding from DST Global, Coatue, Sequoia, Hillhouse, among others. According to the media, it is also in talks to raise $ 200 million from existing investors worth approximately $ 2 billion. The new cycle will also have a secondary component and Chinese backers, including Hillhouse and Morningside, as well as angels. can go out of the company.