In our post-modern and increasingly complex financial age, the role of credit cards is significant to say the least. It is astonishing but true that according to the RBI data, in April 2023 there were 8.6 crore credit cards outstanding in India, which was a significant growth of about 15 percent from April 2022, when there were 7.5 crore outstanding credit cards in India. In fact, the growing importance of credit cards over the last two decades has given impetus and strength to the approaching credit economy.
However, credit cards’ operations thrive on the trust of its customers to make timely payment of credit card bills. In this credit-friendly economic climate in India, the role of Bengaluru-based Indian fintech company named CRED is likely to increase with each passing year.
Established in 2018 by Kunal Shah, CRED is positioned as an exclusive members-only club that incentivizes individuals for their punctual credit card bill payments by offering exclusive perks and access to premium experiences. It serves as a platform enabling credit card users to oversee multiple cards alongside analyzing their credit scores.
Rewarding Credit Worthiness
In 2018, Kunal Shah introduced CRED as “a platform to celebrate and reward the most creditworthy people of India.” Kunal is a renowned serial entrepreneur, with ventures like PaisaBack and the coupon-based app for mobile recharge, Freecharge to his name. The valuation of CRED by June 2023 was $6.4B, which is simply astounding for a six-year-old company.
One can say that the Fintech unicorn CRED is founded on the philosophy of rewarding credit trustworthiness. CRED functions through a reward-based credit card payments app, which is also named CRED. Whenever you make payments for your credit card bills through CRED, you earn CRED coins, which can be utilized to unlock exclusive rewards or gain privileged access to specially curated products and experiences. You can also use your CRED coins to participate in games and raffles to win exclusive rewards and cashbacks on CRED.
Users who possess a high Experian or CRIF score qualify for exclusive rewards when they settle their credit card bills via the application. Among many of the features in the app are CRED’s credit card spend tracking and management feature which provide the users with analysis of spend tracking and efficiency of usage of their card.
According to details available on the CRED website, CRED incorporates the CRED Protect feature, which employs AI to oversee every facet of a credit card payment journey, encompassing due date reminders, spending trends, and additional card usage metrics. Moreover, members who make credit card payments through the app are entitled to a diverse range of rewards, including access to events, experiences, gift cards, and upgrades from brands such as Diesel, Cure.Fit, Myntra, Olive Bar & Kitchen, and many others.
By 2021, just three years after its inception, CRED had enlisted over 5.9 million users and facilitated approximately 20 percent of all credit card bill payments in India.
Income, Funding and Acquisition
CRED’s total income for the fiscal 2023, which ended on 31st March 2023, escalated three-and-a-half times to reach Rs. 1,484 crore from Rs. 422 crore in its previous fiscal. However, its loss also increased from Rs. 1279 crore in FY22 to Rs.1347 crore in FY23. It is perhaps because, in FY23, CRED’s total expenses galloped by 66 percent from that of FY22 to reach Rs. 2,831 crore. However, its losses (excluding ESOP cost) reduced by 10 percent, from Rs. 1,167 crore in FY22 to Rs. 1,047 crore in FY23.
The six-year-old company has generated handsome funding so far. By October 2023, Cred had raised over Rs. 8,000 crore. According to Tracxn, CRED raised $140M in its latest funding round, which was Series F round held on 3rd June 2022 and generated a total funding of $1.07B over 10 rounds.
Lathe Investment, Tiger Global Management, Sofina, Alpha Wave, Dragoneer Investment Group, Rise Global Capital, SF Roofdeck Capital, DF International Partners were the investors in its latest round of funding. Lathe Investment leads the latest funding round for CRED. Till now CRED has attracted 82 investors. According to Tracxn, CRED’s largest funding round was a Series E round held on 19th Oct 2021 for $251 million.
On February 2024, with the acquisition of Kuvera, an online wealth management platform for mutual funds, stocks, fixed deposits, and US stocks, CRED did make an entry into the wealth management space. It was the fifth acquisition for CRED since its inception.
Prior to this acquisition, CreditVidya was acquired by CRED in November 2022. Just two months back to that, CRED also acquired a minority stake in LiquiLoans, in September 2022. CRED took over liquor purchase and delivery startup HipBar in October 2021 and expense management startup Happay, in December 2021.
