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CRED Growth Plan

The document discusses CRED's business model and strategy to grow its annual recurring revenue (ARR) to $5 billion by 2028. It focuses on using lifestyle services to acquire and engage users, then cross-selling higher-revenue financial products. Key aspects discussed include increasing ARPU through new products, drivers of revenue growth, optimizing the product mix between lifestyle and financial offerings, and potential challenges around competition, projections, and regulations.

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prashantmalukani
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78 views10 pages

CRED Growth Plan

The document discusses CRED's business model and strategy to grow its annual recurring revenue (ARR) to $5 billion by 2028. It focuses on using lifestyle services to acquire and engage users, then cross-selling higher-revenue financial products. Key aspects discussed include increasing ARPU through new products, drivers of revenue growth, optimizing the product mix between lifestyle and financial offerings, and potential challenges around competition, projections, and regulations.

Uploaded by

prashantmalukani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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cashback to cha-ching:

turning bills into billion-


dollars

Anandh | Praneel | Prashant


Executive summary
01 Business model and current metrics

02 Exploring the key drivers of revenue


Increasing number of customers
Increasing ARPU
$5 Billion goal is
unrealistic. However,
03 Optimizing the product mix
Lifestyle products for acquisition and engagement
ambitious target of $3
Financial products for revenue
Lending
Billion is achievable.

04 Potential pitfalls
Threat of competition
Implicit assumptions in the projection
Regulatory challenges
IT'S NOT JUST A FINTECH PLATFORM, IT'S A LIFESTYLE
PLATFORM

NUMBERS AT A GLANCE BUSINESS MODEL


Lifestyle services- Focus on engagement and delight
Metric Value
Most of CRED's revenue streams (CRED Pay,
RentPay, Store Travel,etc) are classified as lifestyle
MAU 1.6 Cr offerings. The focus is on providing users with
convenient and rewarding ways to shop, pay bills,
Current Revenue ₹ 1,484 Cr and travel
Financial services- Focus on Revenue
ARPU ₹ 928 CRED Stash:Digital credit line for instant online loans
CRED Mint: P2P lending platform offering high interest
returns

USPs of
USP cred Key Insight
Lifestlye services bring customers to the app and
CRED’s key asset is the distribution they have built keep them engaged, which enables cross selling
to a large section of affluent users of financial services to generate most of the revenue
7x growth in ARPU combined with new products
= $5 Billion ARR.
20% CAGR IN CREDIT CARDS
Market size (X Cr Credit card users) Increasing internet penetration and rising
disposable income among middle-class
No. of users X
and affluent segments.
Market share 33%)

REVENUE X 10% CAGR IN CRED REVENUE

Lifestyle products (10% of Revenue) Currently one in three credit card holders
use CRED. Data indicates 10% cagr over
ARPU + next five years

+
Financial products (90% of Revenue)
₹6,606 ARPU IN 5 YEARS
CRED needs to reach ~6.2 Cr users by

DRIVERS OF REVENUE
2028. Every 1 in 2 credit card user needs
to be on CRED.

*Source - McKinsey : payment industry revenue projection


Appendix : ARPU projection
Credit card growth rate along with CRED’s market
penetration to help with acheving the right ARPU

Year 2023 2024 2025 2026 2027 2028


Best Case

Users (in Cr) 1.6 2.1 2.7 3.6 4.7 6.2

Revenue (in Cr) 1,484 2,879 5,585 10,835 21,020 40,780

ARPU (in Rs.) 928 1,374 2,034 3,012 4,461 6,606

Year 2023 2024 2025 2026 2027 2028


Worst Case

Users (in Cr) 1.6 1.9 2.3 2.8 3.3 4.0

Revenue (in Cr) 1,484 2,879 5,585 10,835 21,020 40,780

ARPU (in Rs.) 928 1,499 2,424 3,919 6,336 10,243


Lifestyle/engagement products drive the number of paying
users through customer acquisition and delight
KEY OBJECTIVES
Strategy
Acquisition- Bringing in new users to reach target
of 6.2 Cr users Continue adding values to users wherever
Engagement- Keeping users on the app to cross- there is a financial touchpoint
sell revenue-generating financial products
Data utilization- Utilize data to better cross-sell the
financial products

CRED CRED CRED


UPI Track Link

UPI PAYMENT EXPENSE TRACKER ACCOUNT


AGGREGATOR
Value for user - Seemless UPI Value for user - Insights into spending Value for user - Streamlined
usage through Cred app habits, potential avenues for saving access to financial products

Value for Cred - High enagement Value for Cred - Help assess risk Value for Cred - Enables
of users on the platform tolerance for cross-selling enhanced personalization,
targeted product
recommendations
Revenue is primarily driven by cross-selling high-value
financial products
Organic growth
26.6%
KEY OBJECTIVES Strategy
Organic Revenue - Increase Personal Loans Leverage our distribution to keep
revenue of existing financial 46.3% introducing financial products to
products ( CRED Stash, Mint) Cred Cards
affluent customer base.
New Revenue - Identify novel 7.4%
financial products to cross-sell Wealth Management
to the customers 10.7%

Lending Wealth management CRED CARD


Personal loans remain Access to more investment Obtain NBFC license to
the largest source of products personalized to operate and issue credit
revenue the user cards
Revenue from banks Brokerage fee Revenue from transaction
providing home loans for fees
discoverablity

Estimated revenue = ₹12,988 Cr Estimated revenue = ₹2,520 Cr Estimated revenue = ₹1,740 Cr


Lending continues to be a powerful engine for our revenue
generation

PERSONAL LOANS HOME LOANS


Leverage CRED’s competitive interest rates, Use CRED’s in-house risk assessment tools and
personalized EMI plans, quick loan disbursal and analytics to cater to the surge in demand for
hassle-free application process to make housing loans due to rising disposable incomes,
personal loans attractive to borrowers. and government initiatives to promote affordable
housing.
Competition - Banks (70%), NBFCs (30%)
Competition - Banks (65%), Housing Finance
Estimated Revenue(2028) = ₹10,888 Cr ARR Companies (35%)

Estimated Revenue(2028) = ₹2,100 Cr ARR

*Revenue source - Appendix, Market share in brackets


Potential challenges across key business areas

The achieved credit Market is highly competitive, Regulations may


card industry growth with a large number of stifle innovation and
rate is lower than the players operating in the competition, which
projected industry market, resulting in intense can negatively
growth rate competition among players impact the financial
services industry
thank you

appendix

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