Listed fintechs cut marketing spends to boost fundamentals
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Listed fintech startups undertook major cuts in marketing and promotional expenses in the past few quarters in a bid to achieve profitability in their core business or strengthen business fundamentals in a tough environment, showed stock exchange filings.While One 97 Communications , which runs Paytm , has been on a cost cutting spree, PB Fintech also reduced marketing spends in the past two quarters.It comes even as Paytm reported its first business-driven profitable quarter in June . While achieving revenue growth has been a major challenge in a tough macroeconomic environment, cutting costs at multiple business entities actually helped improve profit.Paytm reported less than Rs 100 crore in marketing spends for the June quarter, 55% less than Rs 221 crore a year ago.'The point is how much can costs be controlled without compromising growth, given competition is severe and consumer-facing platforms need to invest in brand building,' said a senior fintech executive, who did not wish to be identified.Overall Paytm reduced expenses 20% year-on-year in the June quarter, according to the regulatory filings. Its revenue increased 27% to Rs 1,917 crore from Rs 1,501 crore during this period.'I do think there is always a corner where we are able to find some cost, but they will not be material. So it is not the agenda, so we are not actively pursuing cost cuts, while I'm definitely pursuing whatever (cost) is not necessary to drop it out of the window,' Vijay Shekhar Sharma, chief executive, Paytm, said in response to an analyst question on cost cuts after the June quarter results.Similarly, PB Fintech, which runs insurance marketplace Policybazaar, has reported a gradual reduction in its marketing and advertising expenses over the past two quarters.For October-December 2024, PB Fintech reported marketing expenses of Rs 289 crore, which went down to Rs 277 crore in the March 2025 quarter and further to Rs 253 crore in the June quarter.While the company is investing heavily in building its new line of businesses, for the core operations the firm has tried to keep its costs low.Speaking to stock market analysts after FY25 results, Policybazaar CEO Sarbvir Singh called out employee costs among the major expense items and said that despite expanding teams through the year, the company kept the spending flat in the last quarter of 2024-25, which helped improve the contribution margin in the business.For Mobikwik, the challenge has also been to ensure revenue growth in the past one year. Its revenue fell almost 21% year-on-year in the June quarter while its overall expenses went down 9% year-on-year. While the Gurgaon-based payments firm does not offer a breakdown of its marketing costs, its broader 'other expenses' category, which includes this head, reduced to Rs 77 crore from Rs 82 crore a year ago.For payments firms, which mostly ride on banks' infrastructure to process digital payments, the rise in business volume comes with a corresponding jump in payment processing charges, one of their major cost lines. For instance, Mobikwik reported a jump in payment gateway costs to Rs 142 crore from Rs 127 crore a year ago.'Promotional spends is one lever where the management has full control, but again too much reduction of these expenses can hurt business as well, so it will be interesting to see how growth and spends get balanced from here on,' a stock market analyst who tracks fintech startups said on condition of anonymity.
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