Segment – payment and credit card management software
About
The company was formed in April of 2018 with headquarters in Bengaluru, Karnataka, India. This is the second startup venture for founder, Kunal Shah.
The firm offers a number of products –
CRED Application – To manage their rewards and bills, a credit card user application was developed. Bill reminders and payment monitoring are application features. Every transaction generates a CRED coin, which can be used to access exclusive offers from affiliated partners. The application analyzes total expenses, generates statements, and advises credit card users.
CRED Pay – Cred works with Razorpay and Visa. Platform for instant payment. Direct-to-consumer marketing
CRED Stash – A digital lending network that lends money based on credit reports (CIBIL) with no subscription fees. The banking partner charges interest on the funds. All transactions are completed using CRED apps.
Seed Investor Sequioa Capital India Fund Raised $30M Round Sequoia Capital India, Ribbit Capital, and seven other investors contributed to the $636K Series A round of funding. DST Global, Tiger Global Management, and seven other investors contributed to the fund’s $120 million Series B round. Fund Raised $81M Round Series C Investor Coatue Insight partners and nine others Fund Tiger Global Management, Marshall Wace, and eight others contributed $215 million in Round Series D funding. GIC Singapore Tiger Global Management and three others contributed to the $251 million Series E fund. Round Series F raised $80 million in funding.
Philosophy/key insight
CRED, an Indian fintech startup, has achieved significant success, with a $2.2 billion valuation. CRED, which was founded in 2018, operates on the “Hole and hook” model, rewarding users who pay on time. Kunal Shah founded the company in response to a flaw in the credit card payment system with superior UI/UX design. They are attempting to resolve credit payment and transaction issues through their applications, which aid in bill reminders, payment scheduling, and credit card payment automation. They also developed Cred Pay, which allows for the transfer of funds in P2P and B2C transactions via UPI.
Media
CRED’s NEW Game Plan, INC42.com, May 2023, https://inc42.com/features/cred-new-gameplay/
Paytm and PhonePe, despite having more users, have also taken too long to show signs of profitability. Furthermore, while UPI has transformed payments, the profitability of UPI apps has been hampered by schemes such as zero merchant discount rate, which, ironically, has played a critical role in driving UPI’s growth, surpassing credit cards in the digital payments space. CRED is aiming for lending with its latest announcements, which include a buy-now-pay-later (BNPL) service called CRED Flash and a tap-to-pay for retail payments using credit cards, in addition to the UPI. This, however, may complicate matters for CRED, which already has several verticals in fintech and ecommerce. The other question is whether CRED’s network of 500 merchant partners, native bill payments, and ecommerce marketplace are large enough to outperform its competition, which has much greater penetration. CRED adds BNPL, CRED Cash, and CRED Mint to app, aiming for 11.2 million users. Although the company’s remuneration of INR 15,000 per month has attracted attention, the company’s future success will be determined by its ability to attract investors and serve high-end, valuable customers.
Story of failure to enter unicorn startup, Rushab Pragwat, May 2021
CRED, an Indian fintech startup, has become the most successful in recent years, with a valuation of around $2.2 billion. CRED, founded in 2018, operates on the “Hole and hook” model, rewarding users who pay on time. The company was inspired after noticing a flaw in the credit card payment system. Kunal Shah, the founder, was inspired to launch CRED after witnessing the problem. Kunal Shah’s brilliance is responsible for the company’s global marketing campaign and over 60 lakh users. CRED has raised $471.2 million in funding and won the award for best UI/UX design. The startup has also been recognized by the 2020 National Startup Awards.
Prepared by – Ajinkya, July 2023
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