CRED, headquartered in Bangalore, offers credit card users a platform to pay their bills while earning rewards for each transaction. It also facilitates house rent payments and provides short-term credit lines. Founder Kunal Shah emphasizes the company’s focus on trust and data security. Launched in 2018, CRED is often described as a TrustTech company, with Kunal Shah being a prominent figure in the startup ecosystem, actively supporting numerous startups.
Kunal Shah’s vision
Kunal Shah’s vision for Cred was to create a platform that benefits individuals with good credit scores, improving their financial lives and fostering a positive cycle. While many focused on the masses, Shah aimed to address the specific needs of responsible taxpayers who had been overlooked. Cred’s mission is to reward those who pay on time, addressing a historical gap in the system.
The business model
Cred’s business model is built around its user-friendly app, where users can access exclusive offers after settling their credit card bills. Partnering with various businesses benefits both Cred’s customers and those businesses by offering unique deals. In addition to facilitating credit card bill payments, Cred introduced Cred Mint, a peer-to-peer lending platform, allowing users to lend idle funds to creditworthy members with a minimal credit score of 750 or higher, with the flexibility to withdraw their accrued interest at any time.
Products and services
Cred offers a range of products and features to its users. Notable among these is Cred Mint, a peer-to-peer lending feature launched in collaboration with RBI-approved P2P NBFC, Liquiloans. Cred Cash provides a flexible credit line without paperwork. Rent Pay allows users to pay rent via credit cards, and Cred Store offers an eCommerce platform with premium brands. The platform expanded to include utility bill payments and mobile, DTH, and FASTtag recharges.
The Tap to Pay feature enables NFC-equipped Android users to make contactless payments. BidBlast is a bidding game using CRED coins, while Cred Flash offers BNPL services with partner merchants. Cred Escapes provides premium privileges, exclusive events, and lodging. P2P Payments allow users to send money via UPI IDs or contact numbers. In collaboration with NPCI, Cred launched RuPay credit card-based payments, promoting spending and credit sector inclusion.
Funding till now
Cred’s funding journey has seen substantial investment, totaling over $1 billion across ten funding rounds. The latest funding of $80 million in its Series F round, led by GIC and featuring Sofina Ventures, Alpha Wave Ventures, and DF International, was secured on June 9, 2022. Notable previous rounds include a $200 million venture round in April 2022, and a $251 million Series E round in October 2021, led by Tiger Global and Falcon Edge. In total, Cred boasts 33 investors, with GIC, Sofina, Alpha Wave, and DF International as the most recent additions as of June 9, 2022.
Growth so far
Cred’s impressive growth trajectory began when it entered the unicorn club on April 6, 2021, after a successful Series D round raising $215 million. Kunal Shah revealed that Cred controlled “22% of all credit card payments in India on a monthly basis” in April 2021. The company’s valuation surged to $6.5 billion in 2022 following a $200 million funding round. On July 10, 2021, Kunal Shah shared notable milestones achieved by Cred in June.
Feats and failures
CRED has earned accolades for its user-friendly design, winning the Best UI/UX Design award. The app boasts high user ratings on the Google Play Store and received recognition from the National Startup Awards in 2020.
Kunal Shah’s journey from a potential investing partner at Sequoia Capital to founding CRED showcases his entrepreneurial spirit. Despite initial losses, the company has grown and recently secured its place as an IPL sponsor, demonstrating a promising revenue model that has garnered trust from investors.
Competitors in the market
Cred faces robust competition from several prominent players in the Indian fintech sector. Its primary competitors include Paytm, a well-established fintech app and payments platform; PhonePe, which boasts the largest market share of 50% as of December 2022; Google Pay, developed by Google; Amazon Pay, offering diverse payment options and backed by Amazon; MobiKwik, a fintech company supporting digital payment options; and Freecharge, now acquired by Axis Bank, offering mobile bills and utility bill payment services.
These companies represent a dynamic landscape in the Indian digital payment and financial services sector, challenging Cred’s position.