CRED: The Story of Unicorn Start-up Founded by a Philosophy Graduate
CRED app is a financial services company that provides credit products to Indian customers. In October 2016, Kunal Shah and a co-founder founded the business. The company’s goal is to increase credit availability and affordability in India. The business got off to a fast start, raising $15 million in seed money in just six weeks from Sequoia India and other investors. Cred has experienced rapid growth in the two years since that time, raising $90 million in Series A and B funding rounds. The company is currently among India’s best-funded fintech startups, with a valuation of more than $500 million. With over two million users, the business has immense potential in future.
The History of CRED
After Kunal’s first business, FreeCharge was acquired by Snapdeal in 2015, he spent a lot of time travelling and studying developed countries. One thing he noticed in common with these countries was a high level of trust that the system extended to the population. For instance, they had supermarket self-checkout lanes without cashiers or gas pumps without attendants. As a result, he came to recognise the benefits of a frictionless environment—that is, an environment free from all transaction-related expenses and constraints. He had highlighted in a LinkedIn post how the public trusted the system because it consistently rewarded them for being trustworthy and respectable people.
However, in this case, in the Indian nation, the dependable section of the public was made to pay for the wrongdoings of others, and the ambiguity and the anomaly of the information contributed to a lack of trust. He argued that the current model is rigid and leaves a lot of room for confusion and mistakes, which the reliable part of the public does not deserve. CRED was founded as a result of this.
CRED’s Business Model
The business is based on the “hole and hook model.” Numerous credit card users frequently miss deadlines for making due payments. Users of credit cards who make their payments on time will receive benefits from the company. Benefits are provided in the form of priceless rewards. The business created a “hole” in the credit card payment system and a “hook” in rewards.
What kind of services do they offer?
The company began with only credit card payment services, but it is now expanding its reach into other industries. The CRED app has over 60 lakh users, and that number is growing.
Let’s look at the services offered by the app.
- It enables you to manage all of your credit card payments in one location.
- The app sends you regular notifications about your payment details and due dates.
- It provides new users with rewards and cashback.
- On completion of payment, the company awards CRED points, which can be used to obtain various vouchers.
- The payment method is simple and well-liked by its users.
- They have begun to offer services such as rent, loans, and insurance.
How CRED Earns Revenue?
It is a little different from other startups and has no VC funding and starts making money right away. Users of this membership platform have access to special rewards and benefits from companies like Ola, Zomato, Cleartrip, and many more. Users must subscribe for a monthly fee in order to join. In exchange, they have access to special offers and discounts from the company’s partner brands. Every time a transaction is made through Cred, the company charges brands a commission. It currently has more than a million members and is expanding at a 30% monthly rate. The company intends to employ more people, expand into new markets, and increase its brand partnerships with the funds raised from its most recent round of funding.
The CRED Founder
Kunal Shah, who graduated from Mumbai’s Wilson College with a degree in philosophy and has no prior engineering experience, founded CRED. He dropped out of his MBA studies at the NarseeMonjee Institute of Management Studies(NMIMS). He was a board advisor for Bennett Coleman & Co Limited, Y Combinator, and Sequoia Capital India in addition to heading the Internet and Mobile Association of India from 2015 to 2017. He has served as a mentor for many of Asia’s well-known startups, including Unacademy, RazorPay, Go-Jek, and Zilingo, among others, and is also an active angel investor. PaisaBack, a cashback and promotional platform for organised retailers, was Kunal’s first successful venture.
In August 2010, While the platform continued to function on its own under his direction, he later closed it down to launch FreeChargealong with Sandeep Tandon Snapdeal later acquired FreeCharge in 2015 but Kunal remained the CEO of it. When Kunal left it in October 2016, Axis Bank acquired it in the month of July 2016. Finally, Kunal announced the founding of CRED in 2018. Kunal Shah was born in 1983 in Mumbai. His interests include chess and poker. He enjoys eating chips and guacamole. He is a fan of Socrates’ philosophy and G.B. Shaw’s plays.
Partner Brands
The business provides its customers with a variety of rewards and coupons. Numerous well-known Indian brands have joined as partners with success. Respected brand partners include the following:
- TATA CLIQ
- Cure Fit
- AJIO
- Myntra
- Dineout
- Samsung
- Jio Saavan
- The Lalit
- Puma
- Ethos
Their Honors and Appreciation
The CRED app’s straightforward and practical design earned it the title of best UI/UX design. On the Google Play store, users give the app high ratings. Additionally, the startup received recognition from the 2020 National Startup Awards.
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