Most of us use Credit Cards on a regular basis. Credit Card holds a special place in our hearts as it allows us to make payments on credit. Many of us might be possessing multiple credit cards across different banks, each one with different billing cycles and terms. It becomes very difficult to manage all the credit cards in an efficient manner. It would be great to have an App that could gather all our cards’ details, send us reminders, and even reward us for settling credit card bills. This is what CRED does. Cred provides a single platform where we can handle all our credit cards. In April 2021, Cred entered the prestigious club of unicorn startups with a valuation of $2.2 billion.
Founded in 2018, by Kunal Shah, Cred is a Fintech company allowing its customers to make credit card payments through its platform and offers exclusive rewards and benefits. Cred is headquartered in Bengaluru, India. In addition to credit card settlement services Cred has also introduced short-term credit lines, house rent payments option, and Cred Mint. Credit Mint is a unique service that allows the lenders to lend their idle money to borrowers having decent credit scores at an interest rate of 9% p.a. Cred was started with the basic objective of making credit card bill payments easier and simpler and to reward individuals with good credit scores. Cred is a members-only application and you need to have a good credit score to become a member of Cred. Usually, individuals having a credit score of 750 and above can easily become members of the Cred Club. Cred offers rewards to their members through issuing cred coins to them on payment of their credit card bills. These coins can be exchanged for exclusive partner deals across various lifestyle categories and companies partnered with Cred. Cred also offers vouchers at more than 1,000 retail outlets and online stores & platforms. The tagline of Cred is ‘Suraksha Aur Bharosa Dono’. Cred has become a household name throughout India due to its unique and aggressive advertising and marketing efforts.
Business Model of Cred
As Cred rewards its members for paying their credit bills on time through Cred App, it must partner with various businesses. A simple business model of Cred App would include 3 parties, the members, Cred App, and businesses that offer rewards.
- Cred’s Members: The individuals who are paying their credit card bills through Cred App become its members. These members can earn exclusive rewards by settling their credit card bills through the Cred App.
- Cred App: Cred App acts as an interface between Cred and its members. It provides a platform where members can sign up and settle their credit card bills. As members pay their bills, they earn Cred coins, which can be used to redeem rewards on the App.
- Business Partners: Cred is actively involved in the activity of bringing businesses on board and forming formal contracts with them.
Cred is continuously adding new features and services on its platforms for making it more attractive to its users. Recently in August 2020, it disclosed its new feature Cred Mint, which is designed as a peer-to-peer lending platform helping Cred members lend their idle money to creditworthy borrowers. Cred is also planning of enabling the option of Auto-pay for its members for ensuring timely payments.
Revenue Model of Cred
Currently, Cred is focusing more on expanding its user base rather than making profits. There are many revenue streams for Cred. Primarily, Cred earns money through listing fees from business partners and through monetization of data.
- Listing Fees: Cred lists a large number of products and offers on its platform that benefits the businesses. These business partners pay listing fees to Cred for their visibility. Cred receives a fee from the business every time a user redeems Cred coins from the app to pick a product or an offer.
- Monetization of Data: Cred gathers and stores the financial data of its users who pay their credit card bills using the Cred App. This data not only assists Cred in coming up with better offers and services in the future but also can be used by other banks and financial institutions. These banks and financial institutions pay Cred to gain access to these data.
Apart from these main sources of revenue, Cred also generates some revenue through providing products and services like Cred Stash, Cred Store, Cred Rentpay, Cred Mint, Cred Pay, etc.
Funding and Investors of Cred
In the 8 funding rounds witnessed by Cred, it has raised $722.2 million to date. The current valuation of Cred is $4.01 billion after the conclusion of its Series E funding round in October 2021 led by its existing investors Tiger Global and Falcon Edge. As of August 2021, Cred is being funded by a total of 29 investors.
In recent times, the fintech market of India has become overcrowded with several new startups foraying in this sector. Apart from the new startups, Cred also faces competition from some of the well-established companies such as Paytm, Phonepe, and MobiKwik. Some of the other competitors of Cred include digital payment platforms and fintech companies such as Amazon Pay, Google Pay, etc.
Cred has gained huge popularity among the population and has become a buzzing phenomenon in the last few months largely owing to its successful advertisement strategy during IPL. It has sparked the interest of the audience and more credit card users are entering the App. As per TechStory, Cred has reported a massive increase in both its user base and funding received by it. Cred is well on its way to becoming the next big thing in the Fintech space of India.