CRED - The Credit Card Bill Payment Platform

As fiat currency emerged, plenty of money-related issues got resolved steadily. Yet the problem remained that often, people don’t possess enough money to manage their expenses. In such scenarios, the magic of credit cards makes its place, i.e, the art of purchasing in advance and paying for it later.  

We all love to splurge and we love to use credit cards to do it! These cards hold an integral place in our lives. But one of the constant challenges is to be able to perform credit card payments before the due date simply and easily. And this problem further magnifies, when we possess a collection of credit cards across different banks, each one of them having a separate billing cycle. Now imagine there is an app that gathers all this information, sends you reminders to carry out timely payments, and to top it - offers you rewards for paying bills. This is exactly what CRED is. Simplifying our financial & credit card bill payment transactions.  

About the Founder (Kunal Shah) & the History of CRED

Cred is a Fintech platform headquartered in Bengaluru founded by Kunal Shah which allows its users to make credit card payments through its app and gives exclusive offers and other benefits online.

Kunal Shah can be called a serial entrepreneur. He is among some Indian entrepreneurs who have launched a new startup/venture for the second time. An MBA dropout from Mumbai’s Narsee Monjee Institute of Management Studies, Shah had earlier launched ventures such as PaisaBack, a cashback and promotional discount campaign platform for retailers. However, he eventually shut down its operations to found FreeCharge in 2010.

FreeCharge was acquired by Snapdeal in April 2015 but the company still continued as an independent entity led by Shah. He left the firm the next year and eventually founded Cred in 2018, which has successfully turned unicorn on April 6, 2021. FreeCharge, on the other hand, was acquired by Axis Bank in July 2017.

Entrepreneurs usually focus on their own companies rather than investing in startups of other people. But serial entrepreneur Kunal Shah, who in the past founded of Freecharge, is an exception.

As per Hurun India, Kunal Shah tops the list of entrepreneurs with the most number of investments in startups that may turn unicorn in the next few years. He has invested in nine such companies.

More About Cred 

The concept of credit is something that is not new. People have been opting for credit since time immemorial. Credit is crucial when capital cannot support certain investments, and credit cards had certainly made them easy to avail. However, paying the credit card bills is a priority and equally difficult to manage. This is why Cred decided to come forth with the unique idea of a platform that will help Indians pay their credit card bills on time and also offer them instant offers and rewards for the same.

The goal was very simple. It was to create a platform where life could be made better and systematic. The founder wanted to offer privileges and benefits for the people having good credit scores. And therefore, creating a flywheel effect for more people was important to improve the scores. Everybody, starting from the start-ups to the government, has focused on the masses. The founder of the company wanted to focus specifically on the people, the responsible citizens who pay taxes timely. He felt that nobody had solved their problems earlier.

'If you look at history, nobody has been rewarded for paying back on time. We want to fix that.'-Kunal Shah.

Therefore, Cred was founded primarily to solve the problems of the taxpayers and reward them with attractive rewards in return. Furthermore, Cred has also introduced house rent payment options, short-term credit lines, and Cred Mint, with which the lenders can lend their idle money to the borrowers who exhibit decent credit scores at interests of around 9% per annum.

CRED's - Ecosystem

CRED as a business consists of four parts:

• The Cred app - The Cred app is a neat-looking, beautifully designed app, which the users can visit if they want to go through the offers that are available after they pay their credit card bills. They can easily sign up on the app and view all the offers that they can avail.
• Businesses that provide offers on the app - The users of Cred can also find a wide range of offers from numerous businesses. For this, CRED brings businesses on board and collaborates with them. Along with benefitting CRED and its customers, who can avail of the exclusive offers provided by the businesses, it is also a win-win situation for the businesses. This is because they are also hugely benefited from the visibility they get.
• Users who pay their credit card bills - CRED also serves as a smooth and rewarding platform for the users who use it to pay their credit card bills. In comparison to banking or other apps, the end-users can choose CRED as an app to pay their credit card bills and get numerous offers and benefits. On the other hand, the users who like the app also share CRED with their family and friends.
• Cred Mint - Cred disclosed its new feature, Cred Mint on August 20, 2021, which is designed as a peer-to-peer lending platform help that will help Cred users lend their idle money to creditworthy members. It is a rather transparent process that only allows the trustworthy Cred members boasting of a minimal credit score of 750 or higher to be the borrowers. Furthermore, the lenders can also withdraw their money whenever they want with the interest that they have accumulated for the period.

Cred - Revenue Model

There are 2 prominent ways via which Cred earns its revenue:

• Listing products and offers - Cred lists an array of products and offers that benefit to its users from a range of businesses. These businesses, in turn, pay Cred a fee for their visibility. Every time a user avails of the offers, Cred generates an income through it.
• Using the financial data of the users - Cred accumulates the financial data from the users who use the platform for paying their bills and more. Along with providing Cred with the opportunity to introduce more offers to their users using these data, Cred also has other banks and financial institutions who pay them a fee for accessing these data. These companies, banks, and financial institutions would eventually approach the potential customers with their own set of products aligned to their tastes.

The Twist - Affiliate & Payment Game

CRED has also started playing the CRED points ecosystem game, backed by affiliate commission. CRED is now available as one of the payment options in ecom / transaction-oriented sites. One such being Firstcry. What CRED is doing is, its allowing users to redeem of their CRED points as 'additional discount' on such transaction sites like Firstcry. Now let's say CRED gives 5% discount, it might be earning a 10% affiliate commission since the transaction happened through CRED. And CRED can always promote the brand on their APP as well.

Now this move of CRED is a maverick move. Affiliate commission is a serious business model. And with CRED points as the fulcrum, they can create a rewarding and redemption (neutral) platform, backed by scalable affiliate commission & promotional ads revenue. 

Cred - Funding and Investors

Cred has raised a total amount of $471.2 million in funding over the 6 funding rounds that the brand has witnessed.

Cred - Growth

Cred has shown steady growth throughout the years. Being a startup that was founded in 2018, it successfully joined the unicorn club on April 6, 2021, closing its Series D round where the company had mopped up $215 million. CRED controls "22% of all credit card payments in India on a monthly basis,” said Kunal Shah in his statement released in April 2021.

Kunal Shah further took to his Linkedin profile on July 10, 2021, and shared highlights of the milestones reached by CRED in the month of June:

Cred introduced Cred Mint on August 20, 2021, which will serve as a peer-to-peer lending feature that can be used by the customers of CRED. Cred Mint has been launched by Cred in collaboration with RBI-approved P2P Non-Banking Financial Company (NBFC), Liquiloans. With this feature, the Cred members can now lend money to the trustworthy members of Cred based on the predefined interest rates. Cred Mint can be used to lend another creditworthy user to help them earn around 9% per credit. However, it is also declared that Cred Mind will only be available for users with decent credit scores.

Cred - Competitors

The top competitors of the company are Paytm, PhonePe and MobiKwik.

• Paytm is the top competitor of Cred. It is a fintech app and payments platform that is headquartered in Noida, Uttar Pradesh, India, and was founded in 2010.
• PhonePe is another notable competitor of Cred. It is also a digital payment and financial services platform headquartered in Bangalore, India, which was founded in 2015. This app has the largest market share of 46.04%, as of July 2021.
• MobiKwik is yet another fintech company, which supports digital payment options and is a rival of Cred at the same time. It is headquartered at Gurugram, Haryana, India, and was founded in 2009.

The other competitors of Cred include digital payment applications and fintech companies like Google Pay, Amazon Pay, and more.

 The growth of CRED’s platform has also largely been propelled by its marketing campaign amidst the ongoing Indian Premier League (IPL) cricket tournament. 

As per an article by TechStory, the company has reported an increase in both its user base as well as on the findings it is receiving. The platform’s board director, Shailendra Singh tweeted that it has been registering a 6-7 times increase in new users since IPL began. The massive audience of the cricket tournament has definitely helped boost the popularity of the application. 

The platform is hoping to gain revenue by charging a fee for leveraging Rentpay aside from the revenue share gained from its credit line offering. It also plans to charge a fee from brands for listing their products on the 'Discover' platform where the users can spend CRED coins to avail of discounts.

Cred Numbers

Total Funding Amount: $471.2M

Total Funding Rounds: 7

Investors: 29

References

analyticssteps.com/blogs/success-story-cred

https://yourstory.com/people/kunal-shah

https://economictimes.indiatimes.com/markets/stocks/news/no-one-is-as-bullish-on-startups-as-cred-founder-kunal-shah/articleshow/85862523.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

https://startuptalky.com/cred-success-story/

https://www.crunchbase.com/organization/cred-6ab0