Cred: The Indian Fintech Unicorn’s Journey from Losses to Growth | CRED Startup Wiki.

In the world of Indian fintech, Cred has emerged as a prominent player since its inception in 2018. Founded by Kunal Shah, Cred offers a unique proposition – allowing users to pay their credit card bills while being rewarded for timely payments. However, this innovation has come at a cost, with the company initially struggling with losses and massive marketing expenses. In this article, we will explore Cred’s history, services, funding journey, marketing strategies, and its recent financial performance, showcasing its remarkable transformation.

History of Cred:

Cred was founded in 2018 and quickly became India’s most valuable fintech unicorn startup. Its primary offering is a platform that incentivizes users to clear their credit card dues on time. In its early days, the company faced financial challenges, recording a negative operating cash flow of Rs 117.84 crore in the fiscal year 2018-19.

Services Offered by Cred:

Cred’s main service is facilitating credit card bill payments, which reward users with credit coins that can be redeemed for various rewards and value-added services. The platform also provides payment reminders to ensure users don’t miss due dates. Security is a top priority, with end-to-end encryption safeguarding user data and transactions. Additionally, Cred offers a rent payment service, allowing users to pay rent using Cred app credit with a 45-day grace period, all while earning cashback through cred coins.

Funding Journey:

Cred’s growth has been supported by substantial funding rounds. It raised $30 million in a seed round in 2018, followed by a series A round led by Sequoia Capital India. The company continued to attract investment, with a $120 million series B round, and in 2020, it secured around $81 million in a series C round. Cred’s valuation reached $2.2 billion in 2021 after a series D funding round, where it raised $215 million led by Falcon Edge Capital and Coatue Management.

Marketing and Advertising Strategies:

Cred’s marketing and advertising strategies have been noteworthy. The company entered strategic partnerships with sports events, celebrities, and news platforms. It became an official sponsor partner of the Indian Premier League (IPL), a deal valued at Rs 120 crore for advertising over three years. Cred leveraged celebrity endorsements, featuring notable names like Anil Kapoor, Govind Abuja, Rahul Dravid, Madhuri Dixit, Bappi Lahiri, Udit Narayan, and Kumar Sanu in its marketing content and videos.

Financial Transformation:

Cred’s financial journey has been marked by losses, with losses of Rs 1,347 crore in FY23. However, it also witnessed substantial revenue growth, with revenues reaching Rs 1,400 crore in FY23. The company attributed this growth to a broader mix of products, resulting in higher total payment volume (TPV) and revenue. Its TPV grew to Rs 4.4 lakh crore in FY23, a remarkable year-on-year increase of 77%. The user base expanded significantly, with over 58% growth in monthly transacting users during FY23.

Conclusion:

Cred’s journey from inception to becoming a fintech unicorn reflects the dynamism and innovation in India’s fintech sector. Despite initial losses and high marketing expenses, the company has successfully transformed itself into a significant player in the Indian digital payments landscape. With its unique approach to incentivizing credit card bill payments, Cred continues to grow and reward its creditworthy users, positioning itself as a fintech success story in the making.