Business growth of Clear rebounds following shift to B2B focus
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Cleartax, once a dominant player in consumer tax filing, has successfully pivoted its business to focus on enterprise GST compliance and CFO office software, driving significant growth and revenue. This strategic shift has positioned the company as a major player in the enterprise SaaS sector.
The move towards enterprise solutions has had a profound impact on Cleartax's financial performance. Today, the enterprise segment accounts for 75% of Cleartax's revenues, with consumer services contributing the remaining 25%. This shift has been instrumental in Cleartax's revenue growth, with the company reporting a nearly doubled revenue of Rs 210 crore in FY24, while narrowing losses to Rs 96 crore.
The enterprise segment's growth is evident in Cleartax's global clientele. The company now serves around 4,000 enterprises globally, including Fortune 500 companies, with over 20% of revenue coming from international markets such as the Middle East, Southeast Asia, and the European Union. Cleartax's expansion started with a foothold in Belgium, Germany, and France.
Beyond tax filing, Cleartax's CFO-tech platform offers comprehensive services. It covers GST/VAT compliance, e-invoicing, vendor management, regulatory reporting, and even extends to company secretarial services for listed entities. Strategic acquisitions like Xpedize (invoice discounting) and CimplyFive (compliance automation) have further broadened Cleartax's enterprise SaaS suite.
The shift towards enterprise solutions was prompted by the simplification of government e-filing systems, reducing dependence on consumer portals. Cleartax's co-founder and CEO, Archit Gupta, believes that small businesses are adequately served by their accountants and are not necessarily looking for tech solutions. Instead, the focus is on addressing the complex compliance needs of large firms.
Cleartax's AI-driven features have attracted two lakh gig workers and enabled Rs 30 crore in refunds last year. AI-driven efficiency gains are expected to improve margins, according to Gupta. The company also claims that its platform is competitive against global incumbents, credited to its experience in handling billions of e-invoices annually and navigating complex multi-state tax compliance in India.
Despite the success, Cleartax has no immediate plans to raise funds or go public, according to Gupta. The company remains focused on growth, particularly in AI and global expansion. With its strategic shift, Cleartax has established itself as a significant player in the enterprise SaaS sector, addressing complex compliance needs of large firms and delivering diversified SaaS services beyond core tax filing, ensuring solid and sustainable financial performance.
[1] Source: Various media reports and Cleartax's official statements [2] Source: Cleartax's FY24 Annual Report [3] Source: Cleartax's FY23 Annual Report [4] Source: Cleartax's FY22 Annual Report [5] Source: Cleartax's FY21 Annual Report
- Cleartax, initially a dominant force in consumer tax filing, is now thriving in the enterprise GST compliance sector and CFO office software, growing its revenues significantly.
- The technology-driven enterprise segment now contributes 75% of Cleartax's total revenues, while consumer services contribute the remaining 25%.
- Cleartax serves about 4,000 enterprises worldwide, including Fortune 500 companies, with a sizable portion of revenue coming from international markets.
- Beyond traditional tax filing services, Cleartax's CFO-tech platform offers GST/VAT compliance, e-invoicing, vendor management, regulatory reporting, company secretarial services for listed entities, and has expanded through strategic acquisitions such as Xpedize and CimplyFive.
