Slice, a Bengaluru-based fintech unicorn, reported a 2.5x increase in its consolidated net loss to INR 253.7 Cr in FY22, primarily due to a surge in advertising expenses. However, the startup’s operating revenue rose 4.2x to INR 283.1 Cr during the same period. Slice operates as a buy-now-pay-later (BNPL) platform, offering a credit card-like prepaid payment instrument with no annual charges, no interest, and no late fees. Its revenue primarily came from internet handling fees, commission income from the services provided through its online platform, and interest and commission income from credit facilities provided to individuals. Slice entered the unicorn club in FY22 after raising $220 Mn in its Series B funding round led by Tiger Global and Insight Partners. However, the RBI’s ban on NBFCs from offering credit on PPI led to the unicorn shutting down its vertical offering prepaid credit cards.
The Indian fintech market is expected to grow at a CAGR of 18% from 2022 and reach a size of $2.1 Tn by 2030. However, startups in the sector continue to face challenges with mounting losses. For instance, OneCard, a fintech unicorn, saw its net loss widen over 5.5 times to INR 183 Cr in FY22, while ZestMoney, a BNPL startup, saw its loss grow 3 times to INR 399 Cr during the same year. These challenges highlight the need for startups in the sector to find sustainable business models and keep their costs in check to stay competitive.