THE PURVIEW

STARTUP REPORT
TABLE OF CONTENT

1 ABOUT CRED

2 FOUNDER’S OVERVIEW

3 INDUSTRY ANALYSIS

4 MARKET ANALYSIS

5 COMPETITOR ANALYSIS

6 BUSINESS MODEL ANALYSIS

7 BUSINESS MODEL CANVAS

8 CRED UPI

9 CHALLENGES

10 FUTURE OUTLOOK

11 VALUATION ANALYSIS
 ABOUT CRED
CRED is a members-only credit card bill payment platform that rewards its members for
clearing their credit card bills on time

CRED members get access to exclusive rewards and experiences from premier brands upon
clearing their credit card bills on CRED

CRED partners with the best premier and luxury brands to bring you an unmatched
experience at the end of every credit card bill payment cycle

GOAL PURPOSE
To create a platform where life could be made To solve the taxpayers' problems and reward them
better and systematic. with attractive rewards in return.

The company aimed to offer more privileges Everybody has focused on the masses. The founder
and benefits to people having good credit of the company wanted to focus specifically on the
scores. people, the responsible citizens who pay taxes
timely.

Source(s): StartUp Talky STARTUP REPORT - CRED | ABOUT CRED| 01

 FOUNDER’s OVERVIEW
KUNAL SHAH
If you look at history,
nobody has been
rewarded for paying
back on time. We want
Kunal Shah was born in Mumbai in 1983. His hobbies include playing chess and to fix that.
poker. He loves munching on chips and guacamole. He loves the ideology of
Socrates and the plays of G.B. Shaw.

Kunal Shah is the founder and CEO of CRED. He is an Indian entrepreneur, who is
credited for launching new ventures for a second time.

Kunal was a Philosophy graduate from Wilson College and later went on to pursue
MBA from the Narsee Monjee Institute of Management Studies, but he dropped the
course midway to chase his dreams as an entrepreneur.

Kunal started his entrepreneurial journey with PaisaBack, a website that offers
cashback, coupons, and other offers to users, along with Sandeep Tandon. However,
he eventually shut down the company to found FreeCharge, which the duo founded in
2010. FreeCharge was acquired by Snapdeal in April 2015 but the company still
continued as an independent entity led by Shah.

CRED was founded in 2018 and successfully turned unicorn on April 6, 2021.
FreeCharge, on the other hand, was acquired by Axis Bank in July 2017.

Source(s): StartUp Talky STARTUP REPORT - CRED | FOUNDER OVERVIEW| 02

 INDUSTRY ANALYSIS
Market Size & Growth Regulatory Influence
India's fintech market to reach $150B RBI tightening digital lending norms (impact on
by 2025 and credit-driven growth BNPL players) and KYC, data privacy &
compliance becoming critical

Key Drivers Gratification

Challenges && Recognition
Risks
Rising digital payments & UPI adoption Badges for donors
High customer who cost
acquisition meetfor fintechs and
and Credit awareness increasing
among young users India’s fintech milestones, public
RBI regulations
modelsmedia.
social
recognition
limiting aggressive on
lending

ecosystem is one
of the fastest-
Consumer Trends Revenue & Monetization
Engage Colleges, Trends
Corporates
Preference for reward-based credit payments
growing globally Engage
Shift fromcollege societies
ad-driven to lendingfor on-campus
& transaction-
based
blood models anddrives.
donation Increasing focus on
(CRED, CheQ) and demand for expense
subscriptions & AI-driven insights
tracking & financial literacy tools Engage with corporates for CSR blood
donation programs.

Competitive Landscape Future Outlook

Dominated by CRED (premium) & CheQ AI, blockchain, and embedded finance reshaping
(mass credit payers) Growing fintech industry and Higher adoption of personalized
startups in BNPL, lending, & credit
credit & expense tools
management

Source(s): Linearloop, RBI.org STARTUP REPORT - CRED | INDUSTRY ANALYSIS | 03

 MARKET ANALYSIS
Demographics: Urban professionals and high-income individuals with high credit scores.
Target Market Segmentation Behavioral: Tech-savvy credit card users seeking enhanced financial management and rewards.

User Base: Revenue Growth:

Performance Future Plans:
Over 12 million users Significant surge in
Metrics and Expansion of services, refinement in
by 2024, with a revenue, reaching INR 1,484
Future marketing strategy, and exploration of
projected growth to Cr in FY23, with a projected
Outlook new markets to maintain competitive
18 million by 2025. increase of 25% YoY. edge.

1 Identifying Customers 2 Size of Market

Calculations
Focus Target Audience Content Strategy TAM- Estimated
number of credit card
Approximately 20 million Blogs, social media users in India
Awareness and
potential users who are not campaigns, influencer (approximately 70
education about ToFu (Top-of-Funnel) yet familiar with CRED but are partnerships highlighting the million as of 2023)
CRED's benefits Conversion Rate: 5% to MoFu interested in managing their ease of use and rewards for TAM- $84Billion multiplied by the
credit card bills efficiently. timely payments. average annual value
per user
SAM- (approximately
About 1 million users who are Webinars, comparison charts, $21Billion $1,200).
Positioning CRED MoFu (Middle-of- considering using a credit and targeted offers SAM- Assuming CRED
as the best Funnel) card management app but showcasing CRED's exclusive targets 25% of the
platform for credit Conversion Rate:
need more information on rewards and user-friendly credit card users who
30% to BoFu. SOM- are tech-savvy and
management. why CRED is superior interface.
$3.15Billion high-income.
SOM- Assuming CRED
aims to capture 15% of
BoFu (Bottom-of- Approximately 300,000 users Case studies, trials, live
Funnel) its SAM within the next
Conversion Rate: who are ready to sign up and demos, and personalized
Conversion and retention. 80% to actual
year.
users. need assistance with the customer support to ensure
process or have questions seamless onboarding and
about the platform's features. continued use.
STARTUP REPORT - CRED | MARKET ANALYSIS | 04
 COMPETITOR ANALYSIS

Factors CRED CheQ Walnut Wizi UdharPay Paymandi

Exclusive rewards, Auto-tracks Digital BNPL for

EMI, credit card, BNPL AI-driven credit
premium UX, expenses, bill bookkeeping, credit merchants,
Key Differentiator payments with score tracking,
high-trust reminders, reminders, easy seamless credit
rewards smart financial tips
ecosystem spending insights collections settlements

Premium Credit and financial

Unified bill payments AI-powered Small business Credit-based
rewards-based planning for
Positioning & credit score personal finance credit & ledger payment solutions
credit salaried
improvement manager management for merchants
management professionals

Subscriptions, Commissions on
Monetization Lending, ads, fees Transaction fees Lending referrals SME lending
advisory credit

Source(s): CBinsights, Inc42, Startuptalky STARTUP REPORT - CRED | COMPETITOR ANALYSIS | 04

 CRED vs. COMPETITORS
Strengths of CRED as compared to Weaknesses of CRED as compared to
competitors competitors
Premium positioning High customer acquisition cost
No direct competitor targets India’s high-credit-score users making profitability a challenge.
like CRED.

Limited mass-market appeal

Strong brand & engagement
Gamification (coins, cashback) keeps users hooked. Users need CIBIL scores, reducing the potential user base.

Exclusive rewards ecosystem Revenue dependency

High-end partnerships with premium brands (Taj, Swiggy, Airbnb). on lending & partnerships, unlike Paytm & PhonePe,
which earn from multiple sources (maybe UPI)

Data-driven ending Regulatory risks

CRED Cash offers personal loans based on credit scores with RBI’s strict digital lending norms impact CRED’s lending
lower NPAs. expansion plans.

How Cred Can Stay Ahead?

Expand into wealth management Increase lending flexibility Monetize high-engagement users Partnership with banks
STARTUP REPORT - CRED | COMPETITOR ANALYSIS | 05
Source(s): CBinsights, Inc42, Startuptalky
 BUSINESS MODEL ANALYSIS
Services Provided Revenue Model

Commission-Based Revenue– Earns a Premium Subscription– Offers CRED

Credit Enables credit card and bill
payments with rewards in CRED fee from banks on credit card bill Plus, a paid membership with exclusive
Payment coins, which can be redeemed payments made through the platform. discounts, higher cashback, and perks.
for discounts.

In collaboration with banks Cred

such as IDFC, this instant Data Monetization– Anonymizes and
credit line offers a smooth Stash
aggregates user data to provide market
approach.
insights to businesses and financial
institutions.
Cred Peer-to-peer lending with
returns of up to 9% per
Mint annum, in association with
Liquiloans.
Customer Segment
Provides discounts on brands Cred
partnered with in different
categories utilizing CRED Store
coins

RentPay Facilitates rent and home bill

payments with reminders and
rewards.

Offers flight, hotel, and Cred

restaurant bookings with
reward advantages. Travel

STARTUP REPORT - CRED | BUSINESS MODEL ANALYSIS | 07

 BUSINESS MODEL CANVAS CRED
Key Partners Key Activities Value Propositions Investors Key Resources
Human Resources- over 800
Acko Insurance Credit management It works along the lines of Ribbit Capital employees
Zurich Kotak General CRED Stash velvet rope effect where Peak XV Partners Technological Inputs- uses 19
Insurance CRED Mint people ‘pay together, and can Tiger Global Management technological products and
Go Digit General Insurance CRED Store play together’. QED Innovation Labs services
ICICI Lombard RentPay The all in one application Financial Resources
Sequoia Capital CRED Travel reduces hassle of handling
DST Capital multiple credit cards and
Kuvera making process easy and
convenient
Provides users with instant
Primary Users credit line Channel
Facilitates P2P lending at an
interest rate of 9% to the Website- https://cred.club/
Credit Card Users with High lenders App- CRED: UPI, Credit Cards,
Credit Scores (750+), typically Records loan caps, analyses Bills
urban professionals. hidden costs, tracks due
dates and sends them timely
reminders
CRED coins are awarded for
timely payments

Cost Structure Revenue Stream

Despite a notable increase in revenue, CRED's total operating expenditure, Primary Revenue Sources: nearly 90% is derived from CRED Cash, CRED Max, and
including one-time costs, amounted to INR 3,082 crore in FY24. various insurance products
Operational Revenue Enhancement: revenue grew by 71% to INR 2397 crore in
The company has strategically reduced marketing and promotional expenses by
26.8% to INR 713 crore in FY23 from INR 976 crore in FY22, focusing more on FY24, up from INR 1400 crore the previous year
direct integrations with banks to lessen payment processing charges. Fee-based earnings: capitalizes customers on transactional processes of
approximately 1-1.5%
Interest Income and Financial Services: interest earned on P2P lending and CRED
Stash

06
STARTUP REPORT - CRED | BUSINESS MODEL ANALYSIS | 08
 CRED UPI
The Strategic integration of UPI in Credit Cards

Targeting High-Value UPI Leveraging Credit Cards Monetization & Growth

Transactions via UPI Opportunities
Unlike Google Pay and PhonePe, which A unique aspect of CRED UPI is its
UPI, by itself, is not a direct revenue-
focus on mass-market transactions, CRED UPI on Credit feature, allowing users
generating model (as it has zero
targets affluent, credit-conscious users to make UPI payments using their
MDR fees), but CRED benefits from:
who make high-value transactions. This credit cards. This is a game-changer
gives CRED an opportunity to: because:

Increased user
CRED enables users to
Capture a niche segment engagement, leading to
earn credit card rewards on
of premium UPI users. higher cross-sell
UPI spends.
Offer exclusive rewards and opportunities (such as
It provides an alternative to
cashback, differentiating loans, insurance, etc)
traditional BNPL (Buy Now
itself from mainstream UPI Transaction-based insights
Pay Later) services, offering
apps. that enable better credit
short-term credit through
underwriting for its lending
existing credit card limits.
services.

STARTUP REPORT - CRED | UPI | 09

 CHALLENGES
Despite its rapid growth and innovative approach, CRED is not without its challenges. As the company scales, it encounters hurdles that test its
sustainability and long-term success.

High Operating Losses ₹713 crore

Cost (in Cr.)
800

During FY23, CRED reported a 600 Marketing expenses in the fiscal year
consolidated loss of ~₹1,347 crore
400
revenues of ~₹1,400 crore. 789

*However, the company has experienced

200
Total operating expenses increased by 307 an 80% decrease in customer acquisition
66% yearly to an unprecedented ₹2,832 costs since launch.
0
2023 2024
crore. Staff benefits

Limited Revenue Employee Attrition

Diversification Around 10% of CRED’s workforce leaving since
early 2024.
Over 90% of the revenues for CRED today are from a
This turnover is partly attributed to leadership
handful of products (e.g., payment of credit card bills), but
challenges and a perceived shift in company culture
newer products like the Cred Store have not yet gained
as the focus moves from rapid innovation to
major traction.
maintaining existing products.

Source(s): Economic Times, ToI, Grapevine STARTUP REPORT - CRED | CHALLENGES | 10

 FUTURE OUTLOOK
Functioning as a Fintech Innovator
CRED is positioned to redefine digital finance through continuous innovation and strategic expansion. With a strong brand and a
loyal user base, the company aims to scale its offerings while maintaining a premium customer experience.

Driving Growth through Partnerships

By collaborating with banks and financial institutions, CRED enhances its lending capabilities, managing a loan book of INR 15,000
crore and expanding its reach through new partnerships.

Enhancing Market Penetration

With a focus on product diversification and geographical expansion, CRED is eyeing international markets to leverage its brand
reputation and innovative product suite.

Focus Areas
Product Market Strategic Brand Data-Driven
Diversification Expansion Partnerships Strengthening Insights

Expanding into Exploring global Strengthening Enhancing awareness Using analytics to

investments, insurance, opportunities beyond collaborations with through marketing and refine user
and wealth management India. financial institutions. partnerships engagement and
services. business strategies.

Source(s): Economic Times, Inc42, Canvas Business Model STARTUP REPORT - CRED | FUTURE OUTLOOK | 11
 VALUATION ANALYSIS

Valuation Methodology Financial Insights & Recommendations

The valuation analysis was conducted using the CRED trades at 8.3× EV/Revenue, exceeding the 6.0× average, suggesting overall significantly
Market Multiple Method. CREDs annual revenue was inflated investor expectations relative to comparable peers
multiplied by average Enterprise value by revenue
(EV/Rev) ratio of publicly traded comparables to CRED’s 14.0× EV/EBITDA significantly surpasses the 10.0× peer average, overshadowing
ascertain true valuation. The use of Berkus scorecard near-term profitability concerns and raising serious major valuation questions
and VC Method was discarded as these methods are
Accelerating sustainable revenue growth, improve margins, and maintaining consistent
primarily suitable for pre-revenue startup analysis and
product innovation with strong governance can instill investor confidence
given the fact that CRED has secured Series F funding
and is in its post revenue phase, the chosen method CRED’s user expansion, diversification into financial products, and strategic partnerships
was the most apt alternative for valuation. position it for robust, long-term growth in competitive fintech markets
Source(s): Groww, Trading View, Harlem Capital STARTUP REPORT - CRED | VALUATION | 12
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