Clear delays profits as it expands into Europe and Middle East

“What we’re seeing is that the global expansion opportunity for us has gone up dramatically. We’re having a lot of fun going global, so we’re investing again,” said founder and CEO Archit Gupta.

The push into Europe is being led primarily by the European Union’s decision to pass a piece of legislation called VAT in the Digital Age (ViDA) in March this year, as part of its efforts to modernise Value Added Tax (VAT) rules in the region. According to EY,the ViDA package aims to “reduce the €93 billion VAT gap in the EU” and “make the VAT system more efficient for businesses.” The company declined to comment on how much funding they would be investing in the expansion into the new geographies.

A large part of the ViDA package focuses on mandatory implementation of electronic invoicing, across business-to-government, business-to-business and business-to-consumer transactions. The legislation will be rolled out progressively until 2035, giving members time to implement it in their nations.

“Our first focus is basically going after e-invoicing, which the EU is mandating and something we’re already very good at. That and taxes, we’re good at both,” said Gupta.

In the EU, Clear will be offering its e-invoicing services primarily, which has been the company’s focus in its global enterprise vertical.

Furthermore, the EU is a large market where several multinational brands either have a significant presence or are expanding into the region. It’s also a large market with a gross domestic product of$17 trillion, according to the World Bank Group.

Currently, Clear is running proof-of-concept projects with several clients in Europe in Germany, France, Belgium and Spain. While the company was unable to share by when they’ll be setting up teams in those countries, it did say that they’d be launching in the EU before the first wave of the ViDA mandate sets in. “Our focus is that any new regulation should be solved with our software in a matter of a few days, in the worst case. It’s so we can provide credibility to our customers,” said Gupta.

Middle East push

Clear already has operations in Saudi Arabia. But now it’s making a deeper push in the Middle East, targeting the United Arab Emirates, led especially by its software and invoicing products.

In fact, Saudi Arabia introduced mandatory e-invoicing in December 2021 with the launch of its FATOORA platform. The United Arab Emirates announced the UAE e-invoicing Programme last year. According to EY, the timeline for the anticipated go-live first phase is set to start in July 2026. Oman’s Tax Authority signed an agreement with public-sector telecom company Omantel in May this year to build e-invoicing infrastructure as well.

“In Saudi Arabia, our invoicing software has been growing fast and is solving a key problem there,” said Gupta.

Some of the company’s clients in the two nations include Swedish furniture company IKEA, Southeast Asian ride-hailing and delivery service Grab Taxi, and Dubai-based conglomerate Landmark Group. In India, the company caters to Tata Group’s retail company Trent, insurance provider Tata AIG, and Standard Chartered Bank.

Profitability outlook

ClearTax rebranded to Clear in 2021, ten years after it began as a tax filing portal for individuals in 2011. The rebranding was part of the realisation that their services were not just for individual consumers but also for enterprises.

“Our original hypothesis was to target small and medium businesses, and our software will be used by them,” said Gupta. However, what they found instead was that enterprise users and chartered firms were making up a larger part of their user base.

By 2022, Clear pivoted sharply towards enterprise solutions, which now generate 75% of its revenue, compared to 25% from its B2C business, monetized only three years ago.

While expansion costs are high, Gupta says most regions turn profitable 12 to 18 months after entry. “The regions we’re operating in currently start to generate profits after a 12 to 18-month window. These businesses are margin accretive,” he said, emphasising that customer acquisition is the biggest upfront cost. “After that, it’s a SaaS business, it just recurs.”

In FY24, Clear nearly doubled its revenue to ₹209.8 crore, cutting losses by 59% to ₹96 crore.

The company last raised funds in 2021, netting $75 million in a Series C round led by Kora Capital, Stripe, Alua Capital, and Think Investments, with existing backers like Sequoia Capital and SAIF Partners still on board.