Cred, located in Bengaluru, India, is a emerging fintech company founded in 2018 by Kunal Shah. The platform is dedicated to simplifying the imersive experience of credit card bill payments for users while offering exclusive benefits and rewards. Cred has expanded its services beyond bill payments, introducing features like Cred Cash, Rent Pay and Cred Mint, providing a remarkable financial ecosystem. This article provides Cred’s startup journey, its founder, revenue streams, funding, business model, acquisitions, and competitive landscape.
Kunal Shah, the founder and CEO of Cred, is a Mumbai-born entrepreneur with a background in philosophy and Masters in MBA from the Narsee Monjee Institute of Management Studies. Having previously founded PaisaBack and then FreeCharge, Shah brought significant experience to Cred. The company has grown to a team of over 1600+ employees, indicating its aim of building a robust, successful and dynamic organization.
Business Model:
Cred’s business model revolves around four key areas:
- Cred App: A user-friendly platform where customers can pay credit card bills, explore exclusive offers,benefits and access a range of monetory services.
- Business Partnerships: Collaborations with businesses to provide users with a diverse array of exclusive offers and benefits. This benefits both Cred and partner businesses through increased visibility.
- Users: People using Cred for credit card bill payments are rewarded with remarkable offers and benefits. The positive experience leads to word-of-mouth referrals, increasing Cred’s user base.
- Cred Mint: A peer-to-peer lending platform where Cred users with good credit scores can lend their idle money to other trustworthy members, earning interest from them.
Revenue Model:
Cred generates revenue through two primary ways:
- Listing Products and Offers: Businesses pay Cred for listing their products and exclusive offers, benefits on the platform. Cred earns a charges every time a user avails these offers.
- Financial Data Utilization: Cred leverages user financial data to trigger targeted offers. Banks and financial institutions pay Cred for access to this data, enabling them to tailor their products to user preferences.
Cred emphasizes that it doesn’t charge fees for credit card payments, instead focusing on ancillary services to drive revenue growth.
Financial Overview:
Revenue:
Cred has recorded steady growth and got unicorn status on April 6, 2021, with a valuation of $6.5 billion in 2022. Kunal Shah declared that Cred controls 22% of all monthly credit card payments in India, demonstrating its remarkable market presence. Financially, Cred’s operating revenue increased from Rs 393.5 crore in FY22 to Rs 1,400.6 crore in FY23, reflecting its robust financial performance.
Cred’s total expenses growed from Rs 1,702 crore in FY22 to Rs 2,832 crore in FY23. The breakdown includes marketing, payment processing, employee benefits, legal fees, IT, and other expenses.
Cred’s EBITDA margin significantly improved from -299.24% in FY22 to -86.42% in FY23, showcasing positive financial progress. The Return on Capital Employed (ROCE) increased from -42.66% in FY22 to -31.95% in FY23, indicating improved efficiency and financial health.
| Fiscal Year | Operating Revenue (in Rs Crore) |
|---|---|
| FY22 | 393.5 |
| FY23 | 1,400.6 |
Funding:
Cred has raised over $1 billion in funding across ten rounds. Notable funding rounds include the Series F round, raising $80 million on June 9, 2022, with GIC, Alpha Wave, Sofina and DF International as lead investors. The company’s ability to attract remarkable funding reflects its potential and market traction.
| Funding Round | Date | Amount Raised (in $ million) | Lead Investors |
|---|---|---|---|
| Seed Round | January 1, 2019 | 30 | Rainmatter Technology |
| Series A | April 16, 2019 | 24 | – |
| Series B | July 26, 2019 | 120 | Gemini Investments, Ribbit Capital, Sequoia Capital India |
| Series C | November 30, 2020 | 81 | DST Global |
| Series D | April 6, 2021 | 215 | Coatue, Falcon Edge Capital, others |
| Post-IPO Secondary Round | January 1, 2021 | – | – |
| Series E | October 19, 2021 | 251 | Tiger Global, Falcon Edge |
| Venture Round | April 8, 2022 | 200 | GIC |
| Series F | June 9, 2022 | 80 | GIC, Sofina, Alpha Wave, DF International |
Cred – Acquisitions:
Cred has acquired five companies, including Hipbar, smallcase, Happay and Spenny. The latest acquisition, Spenny, took place on June 23, 2023. These acquisitions have enhanced Cred’s offerings and strengthened its position in the ever-evolving market.
| Company Acquired | Acquisition Date | Deal Value |
|---|---|---|
| Kuvera | February 6, 2024 | – |
| Spenny | June 23, 2023 | – |
| smallcase | August 2, 2022 | 400 million |
| Happay | December 1, 2021 | 180 million |
| HipBar | October 21, 2021 | – |
Cred – Products and Features:
Cred has introduced various products and features to enhance user experience and market presence:
- Cred Mint: A peer-to-peer lending platform allowing users to lend idle money to creditworthy people.
- Cred Cash: A dynamic credit line offering pre-approved credit up to Rs 5 lakhs without intensive documentation.
- Rent Pay: Enables users to pay monthly rent through credit cards.
- Cred Store: E-Commerce platform offering over 500 premium brands across various categories.
- Tap to Pay Feature: Android can make contactless payments by tapping their smartphones.
- BidBlast: A bidding game that allows CRED members to bid using CRED coins without using actual money.
- Cred Flash: Launched in February 2023, enabling customers to make payments using Buy Now, Pay Later (BNPL) within app.
- Cred Escapes: Introduced in March 2023, providing premium privileges, exclusive events, and lodging for CRED members.
- P2P Payments: Launched in April 2023, allowing consumers to send money to other users via UPI.
- RuPay Credit Card-based Payments: A partnership with NPCI in August 2023 to make UPI payments using credit cards.
Cred – Partnerships:
Cred has strategically made partnerships with luxury and premier brands to offer enhanced experiences to users. Notable partnerships include collaborations with LiquiLoans for Cred Mint, Gokwik to improve online shopping, Razorpay for Cred Pay and Shopify to provide payment methods for merchants.
Cred – Competitors:
Cred faces competition from remarkable players in the fintech sector, including PhonePe, Paytm, Google Pay, Amazon Pay, Freecharge, and MobiKwik. Each competitor brings its unique offerings and services, creating a competitive landscape in the digital payments and credit management i.e in fintech sector.
Cred, under the leadership of Kunal Shah, has disrupted the credit landscape and fintech sector in India with its TrustTech approach. By leveraging on rewarding responsible credit behavior and introducing innovative features and services, Cred has carved a niche in the market. The company’s strategic acquisitions, partnerships, and steady financial growth underscore its position as a key player in the fintech sector. As Cred continues to grow its offerings and user base, it remains a force to be reckoned with in India’s ever-evolving financial services landscape.
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