Kunal Shah’s Newtap Finance Posts INR 5.6 Cr Profit In First Year Of Operations

Newtap Finance, a non-banking finance company (NBFC) founded by Kunal Shah, the founder of CRED, recorded a net profit of INR 5.63 crore in its first year of operation, which ended in March 2023.

According to the company’s filing with the Ministry of Corporate Affairs, Newtap Finance generated INR 15.53 crore in revenue from its operations during the financial year 2022–23 (FY23), with a total revenue of INR 17.06 crore.

In terms of expenses, the company’s total expenditure amounted to INR 9.27 crore. Finance costs accounted for the largest portion of expenses at INR 5.15 crore, while employee benefits expenses reached INR 1.35 crore in FY23.

The filing also revealed that Newtap Finance had a loan book of INR 273 crore at the end of the year, primarily built through CRED, the popular fintech company.

Through CRED Flash, the buy-now-pay-later (BNPL) service that CRED offers, Newtap Finance provides short-term personal loans to CRED users. Currently, CRED Flash is only accessible to select CRED users within the CRED store and on some major e-commerce platforms where CRED is integrated as a checkout option.

Through its service called CRED Cash, CRED, under the direction of Kunal Shah, has already assisted its partner lenders in building a loan book worth about INR 10,000 crore.

In 2021, Newtap Technologies bought out Parfait Finance, which had previously been known as Newtap Finance. After the acquisition, the company was rebranded as Newtap Finance and began its operations in the last financial year.

While Newtap Finance has not yet received any ratings from credit rating agencies, it is anticipated that once it obtains a rating, it will be able to secure debt funding from banks and larger NBFCs.

According to a report by ET, Newtap Finance is currently searching for a CEO and aims to establish a new management team to operate as a full-service NBFC. Additionally, the company intends to position itself as an independent lending platform, working with lenders beyond CRED.

The report cited a source stating, “They will even help other fintechs process loans in a compliant manner by sharing the platform they have built.” Furthermore, the NBFC plans to raise equity and debt capital independently. Earlier reports indicated that Newtap Finance was considering raising around $50–70 million.

To strengthen its lending division, CRED acquired CreditVidya, a lending SaaS startup, in November 2022. CreditVidya operates Prefr, a digital lending platform that has developed underwriting and risk assessment models crucial for lending products.

The acquisition of CreditVidya provided CRED with a second NBFC in addition to Newtap Finance. Prior to launching CRED Cash, the fintech unicorn also invested in lending tech startups Liquiloans and CredAvenue last year.