"Cred's Journey to Becoming a Billion-Dollar Company in Just Three Years"
Cred is a financial technology company based in India that has seen tremendous success since its launch in 2018. The company was founded by Kunal Shah, who had previously founded FreeCharge, a mobile payments company that was acquired by Snapdeal in 2015.
Cred’s business model is centered around rewarding customers who have a good credit score by offering them exclusive deals and discounts on various products and services. The company has partnered with a number of high-end brands, such as Airbnb, Uber, and Amazon, to offer its members discounts and rewards for using their services.
Since its launch, Cred has raised more than $800 million in funding from a variety of investors, including Sequoia Capital, Ribbit Capital, and Tiger Global Management. The company’s valuation has skyrocketed to more than $2.2 billion, making it one of the most valuable startups in India.
One of the key factors behind Cred’s success has been its focus on user experience. The company’s app is designed to be simple and easy to use, and its rewards program has proven to be popular with users. Cred has also been successful in attracting a large number of high net worth individuals as users, which has helped to boost its revenue.
Overall, Cred’s success story is a testament to the power of combining innovative technology with a customer-centric approach. By offering users tangible rewards for good financial behavior, the company has been able to build a loyal customer base and establish itself as a major player in the Indian fintech industry.
Cred - Company Highlights
| Startup Name | Cred |
|---|---|
| Headquarters | Bengaluru, Karnataka, India |
| Sector | Financial Services |
| Founder | Kunal Shah |
| Founded | 2018 |
| Valuation | $6.5 billion (June 2022) |
| Revenue | $11.55 million (Rs 88.6 crore in FY21) |
| Total Funding | $1+ billion (June 2022) |
| Website | cred.club |
Highlights
Cred – About
Cred – Startup Story
Cred – Founder and Team
Cred – Tagline and Logo
Cred – Business Model
Cred – Revenue Model
Cred – Funding and Investors
Cred – Acquisitions
Cred – Growth and Revenue
Cred – Partnerships
Cred – Competitors
Cred - About
Cred is a fintech platform founded by Kunal Shah in 2018, headquartered in Bangalore. The platform allows credit card users to pay their bills, make rent payments, and access short-term credit lines while earning rewards for each transaction.
The company places a high priority on user data protection, ensuring the app is completely safe and secure. According to Shah, Cred is a TrustTech company focused on solving trust issues in Indian society, which he believes is crucial for economic prosperity.
Shah, a well-known figure in the startup ecosystem, has also funded numerous startups.
Cred - Startup Story
Kunal Shah’s goal when founding Cred was to create a platform that could improve people’s lives in a systematic way. He wanted to offer more privileges and benefits to individuals with good credit scores, creating a flywheel effect to improve scores for more people.
While many startups and the government have focused on the masses, Shah specifically wanted to focus on responsible citizens who pay their taxes on time. He felt that nobody had solved their problems before, so Cred was founded with the primary aim of solving taxpayers’ problems and rewarding them with attractive benefits in return.
Cred - Founder and Team
Kunal Shah
Kunal Shah is the founder and CEO of Cred, an Indian entrepreneur who has launched new ventures for a second time. Shah graduated in Philosophy from Wilson College and later pursued an MBA from the Narsee Monjee Institute of Management Studies before dropping out to pursue his entrepreneurial dreams.
Shah began his entrepreneurial journey with PaisaBack, a cashback and coupon website with Sandeep Tandon. However, he eventually shut down its operations to found FreeCharge in 2010, which was acquired by Snapdeal in 2015 but continued as an independent entity led by Shah.
Cred, founded in 2018, turned unicorn on April 6, 2021. Shah was born in Mumbai in 1983 and enjoys playing chess and poker and snacking on chips and guacamole. Cred has an employee strength ranging from 500 to 1000.
Cred - Tagline and Logo
Cred’s tagline is ‘Suraksha Aur Bharosa Dono‘.
Cred - Business Model
Cred’s business model comprises of four parts:
Cred app – A well-designed app for users to view offers after paying their credit card bills, which they can easily sign up for.
Business partnerships – Collaborating with various businesses to bring exclusive offers to Cred’s users, providing visibility and benefits for both parties.
Credit card bill payments – Offering a smooth and rewarding platform for users to pay their credit card bills and receive benefits, leading to word-of-mouth promotion.
Cred Mint – Cred’s new feature, a peer-to-peer lending platform, allows creditworthy members to borrow idle money from other members with minimal credit scores of 750 or higher, and lenders can withdraw their money with accumulated interest.
Cred - Revenue Model
Cred generates revenue through two main sources:
Offering products and deals – Cred provides various offers and deals to its users from multiple businesses, and these businesses pay a fee to Cred for the visibility. Cred earns income every time a user avails of the offers.
Accessing users’ financial data – Cred collects financial data from its users who pay their bills through the platform. This data provides Cred with an opportunity to introduce more tailored offers to its users. Additionally, other financial institutions and banks pay a fee to Cred to access this data, which they can use to approach potential customers with their own set of products that align with their preferences.
Cred has announced that it does not charge any fees for credit card payments made through its app. Instead, it generates revenue from the additional services it provides using its technology and distribution platform.
Cred - Funding and Investors
Cred funding rounds:
| Date | Transaction Name | Money Raised | Lead Investors |
|---|---|---|---|
| June 9, 2022 | Series F | $80 million | GIC, Sofina, Alpha Wave and DF International |
| April 8, 2022 | Venture Round | $200 million | GIC |
| October 19, 2021 | Series E | $251 million | Tiger GLobal and Falcon Edge |
| April 6, 2021 | Series D | $215 million | Coatue, Falcon Edge Capital and others |
| January 1, 2021 | Post-IPO Secondary Round | – | – |
| November 30, 2020 | Series C | $81 million | DST Global |
| July 26, 2019 | Series B | $120 million | Gemini Investments, Ribbit Capital and Sequoia Capital India |
| April 16, 2019 | Series A | $24 million | – |
| January 1, 2019 | Seed Round | – | Rainmatter Technology |
| November 6, 2018 | Seed Round | $30 million | Sequoia Capital India |
Cred - Acquisitions
Cred has made three acquisitions so far, namely Hipbar, Happay, and smallcase. On October 21, 2021, Cred acquired Hipbar, followed by the acquisition of smallcase on August 2, 2022, in a deal worth $400 million.
According to reports dated November 19, 2021, Cred was also looking to acquire Dineout, a Noida-based dining and restaurant tech solutions platform, and Wint Wealth, an alternate investment platform. The Dineout acquisition was expected to be between $25-50 million, while the Wint Wealth acquisition was expected to be around $50 million. However, Swiggy had already acquired Dineout on May 13, 2022.
As per reports on December 1, 2021, Cred had already sealed the deal to acquire Happay, which was expected to be valued at over $150 million and would be a mix of cash and stock. Happay is Cred’s second acquisition after Hipbar.
Acquisitions by Cred:
- HipBar: October 21, 2021
- Happay: December 1, 2021, valued at over $150 million
- Smallcase: August 2, 2022, for $400 million
Cred - Growth and Revenue
Cred is a startup that was founded in 2018 and has shown steady growth over the years. It joined the unicorn club on April 6, 2021, after closing its Series D round where it raised $215 million. Cred controls “22% of all credit card payments in India on a monthly basis.” according to Kunal Shah, founder of Cred. The company’s valuation reached $6.5 billion in 2022 after a $200 million funding round.
In July 2021, Kunal Shah shared highlights of the milestones reached by Cred in June on LinkedIn. Cred Mint, a peer-to-peer lending feature, was introduced on August 20, 2021, in collaboration with RBI-approved P2P Non-Banking Financial Company, Liquiloans. Cred Cash, a flexible credit line, was launched in 2020, and Rent Pay, which enables users to pay their monthly rent via credit cards, was also introduced in 2020. Cred Store, an eCommerce platform, with over 500 premium brands across a wide range of categories, was also launched.
Cred now offers mobile, DTH, and FASTtag recharge options, and as of April 1, 2022, it has launched its utility bill payments segment, allowing users to pay their electricity, water bills, and municipal tax through the Cred app.
Looking at the financial data for FY21, Cred’s operational revenue grew 170 times from Rs 52 lakhs in FY20 to Rs 88.6 cr. Total expenses grew from Rs 379.25 cr in FY20 to Rs 619.43 cr in FY21. The company had a loss of Rs 523.85 cr in FY21 and a loss of Rs 361.11 cr in FY20. The EBITDA margin was -538.3% in FY21 and -1966.2% in FY20.
Cred’s revenues come from house rental transactions, where the company collects convenience fees for the service. It also generates revenue from advertising space and commissions from product sellers on its platform. Cred Mint serves as a peer-to-peer (P2P) lending vertical that helps the company earn interest on loans and other processing fees. In this fiscal year, the company generated a non-operating income from its financial assets worth Rs 7 crore.
The company’s expenses grew considerably during FY21. Cred’s advertisements, which are prominent on television and online media, accounted for 52.3% of its expense in FY21. Employee benefits were the second-largest expense, increasing by 85% YoY. In total, the company spent Rs 619.4 cr in FY21, a growth of 63.3% from the previous fiscal year.
Cred - Partnerships
Cred collaborates with renowned luxury and premier brands to provide its users with unparalleled experiences while settling their bill payments. Moreover, Cred has established other valuable partnerships, such as
Cred Mint, a joint initiative with the peer-to-peer non-bank LiquiLoans, that assists users in investing their savings into a capital pool. Additionally,
Cred Pay, developed in partnership with Razorpay, enables users to make payments using their CRED coins and enjoy a hassle-free checkout process.
Cred - Competitors
Cred faces stiff competition from several players in the Indian digital payments and financial services industry, including Paytm, PhonePe, Google Pay, Amazon Pay, Freecharge, and MobiKwik.
Paytm: A fintech app and payments platform headquartered in Noida, Uttar Pradesh, India. Founded in 2010, it offers a range of services including mobile recharges, bill payments, and online shopping.
PhonePe: A digital payment and financial services platform headquartered in Bangalore, India. Founded in 2015, it offers services such as UPI payments, recharges, bill payments, and online shopping. As of July 2021, it has the largest market share in India.
Google Pay: A digital payments platform developed by Google. It allows users to send and receive money, pay bills, and make online purchases. It is available in several countries, including India.
Amazon Pay: An online payments processing app launched by Amazon in 2007. It allows users to pay for goods and services on Amazon and other third-party websites.
Freecharge: A mobile wallet and payments app originally founded by Kunal Shah and Sandeep Tandon. It offers services such as mobile recharges, bill payments, and online shopping. It was acquired by Axis Bank in 2017.
MobiKwik: A digital wallet and online payment system headquartered in Gurugram, Haryana, India. It offers services such as mobile recharges, bill payments, and online shopping. It was founded in 2009.
FAQs
Is Cred a startup
Yes, Cred is a fintech startup founded by Kunal Shah in 2018.
In which year was Cred started?
Kunal Shah founded Cred in 2018.
What is Cred company?
Cred is a fintech company based in Bangalore that provides rewards on paying credit cards.
Is Cred a fintech company
Yes, Cred is a fintech company founded by Kunal Shah headquartered in Bangalore.
Is Cred an Indian company
Yes, Cred is an Indian fintech company.
Where are the CRED headquarters?
The CRED headquarters is in Bengaluru.
How does Cred make money?
Cred earns money from listing fees that businesses pay to display their products and offers on its app – Cred collects your financial data as you use the app and continue to pay your bills to offer you better offers in the future. To gain access to this data, banks and credit card companies pay Cred.
Is Cred profitable?
Yes, the company has witnessed a massive growth in its revenue from Rs 18.16 crore in FY20 to Rs 95.53 crore in FY21. However, the company hasn’t seen profits to date, while the losses of the company have been registered at INR 524 cr in FY21.
How much are CRED earnings?
CRED earns by listing products and offers and via the financial data of the users. The total CRED earnings for FY21 is INR 95.53 cr.
