JSS SCIENCE AND TECHNICAL UNIVERSITY
SRI JAYACHAMARAJENDRA COLLEGE OF ENGINEERING, MYSURU
INNOVATION STUDIES (20HU220) ASSIGNMENT
Success Story of CRED
Submitted by
Hrishieksh Acharya K, Rudresh Krutharth M, Shashidhara H P, Sriharsha S
To
Dr. Srinidhi
Department of Mechanical Engineering
Table of Contents
1.Introduction
2.About
3.About the founder
4.Origin of CRED
5.Business Model
6.Revenue Model
7.Funding and Investors
8.Competitors for CRED
9.Conclusion
Introduction:
The concept of credit is not something new. People have been opting for credit
since time immemorial. Credit is crucial when one is short of cash for certain
investment or livelihood.
Today, keeping tabs on payment of credit card bills on time is something that
bothers people today. This is why a Bengaluru based start-up has come up with a
solution to help people to pay credit card bills at right time and easily.
Yes, Cred is a fintech platform headquartered in Bengaluru founded by Kunal
Shah in 2018 which allows its users to make credit card payments through its app
and get exclusive offers and other benefits online.
They not only allow people to make payments but also them for rent payment,
short term credit lines. One of the interesting services provided by Cred is that the
customers can lend their idle money to other person which we call P2P services
and the lender gets 9% pa interest, which is exciting to hear but also a great
challenge for the company to make sure the lender gets his money back!!
About:
Established in 2018, CRED is a members-only application which facilitates its
users with exclusive rewards for paying their credit card bills.
The platform has been established with the purpose of making credit card bill
payments easier and to offer the users rewards upon timely payments.
The application functions in a simple manner. It requires them to give their phone
number to inspect their credit score through Cibil, CRIF and Experian.
If a user’s credit score is 750 or higher, they are granted access to the CRED app
or else they are put on the waitlist.
The app examines all the credit cards linked to the user’s phone number and adds
them to the app. Every time the user pays their credit card bills they are credited
with CRED coins which can be burned in exchange for exclusive partner deals
across a variety of lifestyle categories.
These coins can then be adopted for claiming rewards via vendors like Ixigo and
Fresh Menu, as well as others.
The members are also rewarded with offers like vouchers at more than 1,000 retail
outlets from Levi’s or Gap or various online stores like Amazon and Flipkart,
and offers on platforms like Zomato and Cult. For every penny extended towards
payment through credit cards,
the members are rewarded with CRED coins that can be adopted for purchasing
vouchers.
The Founder:
CRED was established by Kunal Shah, who interestingly is a philosophy graduate from
Mumbai’s Wilson college. He dropped out of his MBA from the Narsee Monjee Institute of
Management Studies (NMIMS). He has been an advisor to the board of Bennett Coleman
& Co Limited, Y Combinator, and Sequoia Capital India and was also the Chairman of
the Internet and Mobile Association of India from 2015-2017.Kunal’s initial established
venture had been “PaisaBack”, which was a cashback and promotional platform for
organized retailers.
He later closed down the platform to establish “Free Charge” in August 2010
alongside Sandeep Tandon, which was later in 2015, acquired by Snapdeal although the
platform continued to operate as an independent entity under his leadership. After he
exited the platform in October 2016 it was later acquired by Axis Bank in the month of
July, 2017. Finally in 2018, Kunal announced the establishment of CRED.
The origin of CRED:
Here comes the unique selling point,
After Kunal’s first venture Free Charge had been sold to Snapdeal back in 2015, he
spent a great deal of time traveling and in learning about developed nations. One
common point that he noticed, in particular, was that in these nations there was a high
degree of trust extended by the system upon the public. For instance, they had petrol
pumps without any attendants or self-checkout counters in supermarkets, without any
cashiers.
This resulted in him acknowledging the advantages of a frictionless environment
i.e., an environment in which all costs and restraints relating to transactions are absent.
In a LinkedIn post, he had emphasized how the system was trusted by the public as it
constantly rewarded them for being dependable and respectable individuals. Yet here, in
the Indian nation, the segment of the public which was dependable, had to pay the price
for the acts of others and the absence of transparency and irregularity of information led
to a lack of trust.
He stated how the present model is stringent and left a great degree of scope for
confusion and errors which the trustworthy segment of the public does not deserve. This
led to the establishment of CRED.
Why CRED?
What Kunal Shah says?
"The goal was very simple. It was to create a platform where life could be made better
and systematic. We wanted to offer more privileges and benefits for the people having
good credit scores. Everybody, stating form the start-up to Government, has focused on
the masses. We focused on people who were responsible enough to pay taxes timely. If
you look at the history, nobody has been awarded for paying back on time, we want to
fix that."
CRED-The Business Model
The business model of the company 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
onboard 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, as we know, lists an array of products and
offers that benefit 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.
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.
Date Money Raised Lead Investors
April 6, 2021 $215 million Coatue, Falcon Edge Capital and
others
November 30, 2020 $81 million DST Global
July 26, 2019 $120 million Gemini Investments, Ribbit
Capital and Sequoia Capital India
April 16, 2019 $24 million -
January 1, 2019 - Rainmatter Technology
November 6, 2018 $30 million Sequoia Capital India
Cred is funded by 29 investors in total, as per August 23, 2021, with the recent
investors being Dragoneer Investment Group and Tiger Global Management.
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.
Conclusion:
Cred is an innovative fintech company that aims to bring about a change in the
mindset of Indians with respect to credit cards and personal finance. It is
currently focusing on the particular niche of credit benefits and aims to take the
first movers advantage in the category.
As of now, backed by investors in good faith and with its out of the world
marketing strategies, the company is doing a great job in acquiring its customers
through utilizing cutting edge digital marketing techniques. However only time will
tell how Cred’s true business model will be accepted by the users
