Why Do People Pay Bills Just to Flex? The CRED Story
Introduction
In 2018, India’s fintech space was buzzing with digital wallets, UPI payments, and neobanking solutions. However, credit card holders, a burgeoning but niche group, didn’t have many specialized tools to deal with bills, rewards, and credit health. This opportunity was observed by Kunal Shah , who had previously changed India’s internet landscape with FreeCharge. His latest venture, CRED, sought to ensure that credit card bill payments were not only effortless, but desirable. In five years, CRED was one of India’s most hyped fintech unicorns, basing its ride on a mix of financial prudence, selectivity, and lifestyle benefits.
The Founder: Kunal Shah
CRED was started by Kunal Shah, a philosophy graduate who is now a serial entrepreneur. Prior to launching CRED, Shah had founded FreeCharge, which was acquired by Snapdeal in 2015 for $400 million. In CRED, his vision was different: rather than pursuing mass-market digital payments, he wanted to establish a high-end ecosystem for India’s most creditworthy citizens. His observation was sharp: while there were only about 60 million Indians who used credit cards, these individuals were the top 10 percent of earners in India. They were not merely big spenders but also very valuable to banks, financial institutions, and luxury companies.
CRED’s Business Model
CRED operates on a members-only community business model. Membership is open only to those with a credit score of 750 and more, so the platform serves a high-end base of financially responsible users. The business earns revenue in multiple ways. First, brands and banks compensate CRED to access these customers, as they are a high-value target audience for credit cards, loans, and high-end products. Second, CRED makes money through CRED Pay, which is a checkout option built into e-commerce websites. Third, CRED Store and CRED Travel offer facilitated shopping and booking experiences, making margins on each transaction. Lastly, CRED has constructed its credit ecosystem using products such as CRED Cash, an instant line of credit, and CRED Mint, a peer-to-peer lending product where members can lend to others and earn up to nine percent interest.
Funding and Valuation Journey
CRED’s success has been fueled by substantial investor support. The firm began in 2018 by securing Series A funding of $30 million from marquee investors such as Sequoia Capital and Ribbit Capital, valued at approximately $75 million. In 2019, it had already achieved a valuation of $450 million after securing $120 million. During the pandemic year of 2020, CRED’s valuation increased even further to around $806 million with an $81 million Series C round. The giant leap happened in 2021 when the company took in $215 million and hit the $2.2 billion valuation milestone, becoming a unicorn in the books. In 2022, CRED was worth about \\$6.4 billion following another \\$200 million funding round. In 2023, a secondary sale maintained its valuation at about \\$6.2 billion, solidifying its place as one of India’s highest-valued fintech unicorns.
Financial Performance
The financials of CRED mirror the high-growth, high-burn pattern common to a lot of consumer startups. During its first full fiscal year, 2020, the firm earned revenues of approximately ₹52 crore but incurred losses of over ₹360 crore. Revenue almost doubled to ₹95 crore in 2021, but expenses exploded to over ₹600 crore, leaving a loss of approximately ₹524 crore. By 2022, CRED had made revenues of ₹393 crore, but expenses increased to almost ₹1,300 crore, leaving it with losses of ₹863 crore. By 2023, revenues reportedly exceeded ₹1,400 crore, but the company continued to post heavy losses worth between ₹1,100 crore. Though profitability eludes, CRED’s revenues have increased almost fifteen-fold in three years, spearheaded chiefly by lending, CRED Pay, and growth of its marketplace.
The CRED Ecosystem
CRED has evolved over time from a bill pay app to a lifestyle and financial super app. Members can take advantage of CRED Pay for quick checkout on partner sites, while CRED Store and CRED Travel provide curated shopping and travel experiences. CRED Mint has empowered members to lend to each other with good returns, and CRED Cash offers instant credit lines to eligible members. The firm also launched CRED Protect, which tracks credit scores and identifies potential fraud, and CRED RentPay, by which tenants can pay rent through their credit card and get rewards. This system ensures that customers interact with the app daily, not once a month for paying bills.
Marketing Strategy
The largest strength of CRED has been its marketing. Its offbeat, high-profile advertisement campaigns, particularly during the Indian Premier League (IPL), have become a cultural phenomenon. Ads with Rahul Dravid in his viral “Indiranagar ka Gunda” persona, along with guest appearances by Neeraj Chopra, Kapil Dev, and other celebrities, generated massive brand recall. Aside from television, CRED was an aspirational club with snappy, tongue-in-cheek digital campaigns that resonated with India’s urban millennials and Gen Z. This blend of elitism and humor made CRED one of the most-discussed brands in the fintech space.
Challenges Confronting CRED
CRED’s experience, though, has not been smooth. The market size of the company is naturally constrained, as credit cards are used by only about 60 to 70 million Indians. This limits the amount by which the user base can expand relative to mass-market platforms such as PhonePe or Paytm. Additionally, the heavy cash burn, driven by rewards, promotions, and celebrity endorsement campaigns, continues to pose questions related to long-term viability. Profitability remains elusive, and competition is building from competitors such as Slice, Paytm, and other newer fintech companies joining the high-end credit space.
Social Media Presence
CRED has established a unique presence on social media, with humorous, meme-like content that reflects the tone of its commercials. On Instagram, the brand has in excess of 400,000 followers, and on Twitter (now X) it has a robust community of approximately 170,000. On LinkedIn, CRED has a professional presence with over half a million followers. The overall approach is to look and feel playful, aspirational, and smart — financial discipline cool, not mundane.
Entrepreneurial Lessons
There are a few important lessons that entrepreneurs can learn from CRED’s journey. One, sometimes the right audience is more powerful than going mass-market. By targeting India’s highest earning ten percent, CRED established itself as a premium brand. Two, branding is extremely important. Recallable campaigns like Rahul Dravid’s ad gave CRED a cultural badge way beyond fintech. Third, addressing actual pain points is essential — reminders for credit card bills, tracking of credit scores, and rewards all addressed real consumer annoyances. Fourth, looking beyond the product and creating an ecosystem aids in long-term user retention. Lastly, entrepreneurs need to understand that profitability might take years in consumer businesses but patient investors ultimately reward growth and market leadership.
Conclusion
CRED’s story is a textbook on how niche focus, premium branding, and ecosystem expansion can create a unicorn in an emerging fintech market. Despite its critics raising an eyebrow over its high cash burn rate, CRED has already established itself as a status symbol app for India’s high-end consumers. For founders, CRED illustrates the strength of solving for trust, creating exclusivity, and growing with aggressive marketing. How soon the company can change from high growth to sustained profits remains to be seen, but till then, CRED has become one of the most innovative fintech brands of India’s startup history.
