Peak XV Partners-backed Clear (formerly ClearTax) saw its consolidated operating revenue cross the INR 100 Cr mark in the financial year ended March 31, 2023. The fintech SaaS platform’s operating revenue jumped over 85% to INR 108.8 Cr in the financial year 2022-23 (FY23) from INR 58.7 Cr in FY22.
Clear earns a majority of its revenue from sale of services like tax preparation, e-filing, accounting, investment planning solutions, and others.
In FY23, the startup earned over INR 104 Cr in revenue from subscription of hosted software and other one-time services. Of this, it earned INR 102.1 Cr from taxation-related services, while Cimplyfive Corporate Secretarial Services Private Limited, which Clear acquired in July last year, contributed INR 2.1 Cr.
Clear also recognised an impairment loss of INR 8.13 Cr in FY23 from the acquisition of CimplyFive.
Other sources of Clear’s operating revenue included platform and technical services and commission for acting as a distributor for purchase and sale of mutual funds.
Geographically, India continued to be the biggest market for Clear. The startup earned over INR 103 Cr from the domestic market in FY23, while revenue of INR 5.4 Cr came from outside India.
Overall, including other non-operating income, Clear’s total revenue stood at INR 114.3 Cr during the year under review, up 89% from INR 60.4 Cr in FY22.
Despite this increase in its revenue, Clear’s net loss grew nearly 5% to INR 233.5 Cr in FY23 from INR 222.7 Cr in the previous fiscal year.
Founded in 2011 by Archit Gupta, Raja Ram Gupta, Srivatsan Chari, and Ankit Solanki, Clear said in its FY23 financial filings that its increasing revenue has brought it closer to its profitability goal.
“Our burn is down significantly from its peak. For the first time, we monetised our consumer SaaS business, making it a meaningful contributor to the company’s revenue,” the startup said.
Zooming Into The Expenses
Clear’s expenses grew at a much slower pace in FY23 compared to the rise in its operating revenue. The startup’s total expenditure increased over 21% to INR 343.7 Cr from INR 283 Cr in FY22, with employee benefit expenses accounting for a massive 73% of the total expenses.
Employee Costs Rise: Despite Clear laying off around 20% of its total workforce in the reported fiscal, its employee benefit expenses shot up 12.6% to INR 251.4 Cr from INR 223.3 Cr in FY22.
In that, it spent INR 218.1 Cr on salaries, wages, and bonuses, which increased almost 14% year-on-year (YoY).
Besides, ESOP expenses rose marginally YoY to INR 23.4 Cr in FY23.
Web Hosting and Software Support Charges Zoom: This was the second biggest contributor to Clear’s expenses in FY23, rising almost 64% YoY to INR 33.6 Cr.
Business Promotion Expenses Increase: Clear’s spending on business promotions increased to INR 16.7 Cr in FY23 from INR 13.5 Cr in the previous fiscal year.
Business Outlook
Backed by marquee investors such as Elevation Capital, Y Combinator, and San Francisco-based fintech giant Stripe, Clear has raised over $140 Mn in funding so far.
Earlier this year, it also forayed into crypto tax calculation and filing segment.
In its filings, the startup said its “level of activities” would increase in FY24 as more product launches were in the pipeline
Clear said it was also confident that the sales momentum in its India B2B SaaS business would continue into FY24, especially in Q1 and Q2.
“In the Middle East, we will capitalise on the rollout of e-invoicing. We are also evaluating e-invoicing launches in other countries across the world,” it said.
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