Slice revenue grows 3X despite scrapping its flagship credit on card in FY23

Rajan Bajaj, slice founder and CEO

Fintech unicorn Slice reported Rs 847 crore revenue from its operations in payments and lending business during FY23, a 3X jump from the previous fiscal. The Bengaluru-based firm had reported Rs 283 crore revenue in FY22.

Slice managed to achieve this despite the regulatory clampdown that saw the company scrapping its then flagship product, a revolving credit line on prepaid card during the first quarter of FY23.

However, its losses grew 60 percent to Rs 406 crore in FY23, from Rs 254 crore it reported in the previous financial year.

Of the Rs 847 crore earned by Slice, Rs 472 crore came from interest from loans disbursed by the fintech through its subsidiary, and Rs 375 crore from fees and commissions. The revenue from both sources tripled, despite the challenges of ongoing regulations.

Slice had also launched a UPI payments platform and had attracted a lot of customers to which it continued to disburse personal loans and hence the RBI crackdown on prepaid cards did not affect the company's topline. The fintech last year got RBI’s approval to merge with Guwahati-based North East Small Finance Bank, which is expected to be completed sometime this year. The merger will help the company raise deposits from public, thus reducing its cost of funds for lending, giving it an advantage over other fintechs in the lending space.

"The upcoming development represents a significant step in the banking sector and is a testament to the imminent change on the horizon for the industry. While we acknowledge the challenges this journey will present, our focus remains steadfast on long-term goals," a Slice spokesperson said in a statement.

Expenses stood at Rs 1,276 crore compared to Rs 542 crore in FY22 on rising employee benefit costs, which nearly tripled to Rs 287 crore. Almost Rs 263 crore went towards advertisement and promotion, a 25 percent increase from Rs 209 crore it spent year-ago while the finance cost, including interest on borrowing from banks, non-convertible debentures, and lease liabilities, was up by 159 percent.

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Founded in 2016 by Rajan Bajaj, the Tiger Global and Insight Partners-backed credit and payments startup was among the first set of startups that issued credit line on prepaid cards focussing on young customers with a relatively low credit limit. However, the expected merger with NESFB, Slice looks to take a new avatar with the merger as a digital-first bank focussed on retail customer with credit as its main revenue generator.

Work is on to upgrade Slice's existing pre-paid account holders to full service bank accounts, besides talks around infusion of fresh funds.

In 2022, the fintech faced trouble as the RBI stopped the company from issuing a credit line on a prepaid card following which it has been working on making direct lending as its main product.