The CRED Business Model – Fastest Indian startup to get unicorn status

CRED makes your credit card payments amazingly simple and even rewards you for them. But what’s in it for the 2 billion USD startup? Let’s find out.

Credit card payments are a hassle, especially when you make a rushed purchase. With e-commerce companies on the rise, and nearly everyone out to grab that money in your wallet,  there’s one company that’s rewarding you for making timely payments. And while this is not done in a charitable interest, CRED surely has their customers’ best interest in mind. With absolutely irresistible deals offered when you pay through their app, coupled with money management and tracking features, CRED’s business model serves to become an all-in-one app for all your financial needs, and has come a long way from just being “that  app with the Jim Sarbh ad” (they have roped in Govinda, Anil Kapoor and Madhuri Dixit now).


In this article we’re taking a look at how CRED has gone from a simple fintech app to a rewarding platform that nearly anyone can benefit from, the people at the heart of this exciting startup, how CRED works, and how the numbers stack up, so we know that one of the fastest growing companies in India right now isn’t just all about fun ads and awesome prizes. So let’s start picking apart CRED to understand  what makes it the success it has achieved till date. 

What Is CRED?

Simply put, CRED is an online app that lets you make credit card payments through it, in return for some kind of offer. Everything from earphones to Starbucks, to fancy massage coupons okay, spa) –  there’s something for everyone at CRED. All you have to do is sign up for CRED, link your credit cards, and that’s it. The app will show you all your pending dues, when the next billing cycle is, and what prizes you can win if you pay using their payment gateway.

Playstore Screenshots Cred App

Although not everyone has access to CRED’s rewards program (you need to maintain a certain minimum CIBIL score to avail these offers), you can still use it to track your expenses. This works great for people trying the app for the first time, and helps them get used to financial management, all the time slowly nudging them towards taking the jump to linking their credit cards and start making payments through the CRED app.

About The Founder

Pointing out what CRED did right in just two years since its inception to skyrocket to an USD 800 million valuation is really easy. The Bangalore based startup has been built strong on great marketing, an enjoyable user experience, and irresistible offers – a recipe that every Indian customer adores. Their fun, yet informative skits go so far as to make you watch the whole ad without pressing skip, and that is no simple feat. This “fun, but also serious” attitude basically sums how CRED works, and it undoubtedly gets this trait from its founder, Kunal Shah.

Unless you’ve been completely blind to startups, you probably have heard of Kunal Shah. His tweets are complex pieces of work that often send fans scurrying through the internet to comprehend. The man is not all talk, though, unlike most of twitter. Kunal is an MBA dropout, working for the better part of his career to solve the financial burdens the common man faces.

One of his earliest attempts to disrupt the fintech market in India was PaisaBack, similar to CRED, for retailers to promote campaigns and provide cashbacks. It was shut down in 2010 and paved the way for another fintech startup – FreeCharge. Along with his partner Sandeep Tandon, Kunal built FreeCharge to a commendable level, before exiting the company after it was acquired by Snapdeal in 2015.


With a rich collection of experiences backing his fintech journey, Kunal was ready to go on a solo journey, one that would eventually shape the future of the country and how it looked at fintech apps. In 2018, he founded CRED. Almost 36 months later, the company is looking forward to a $2 billion valuation in 2021. But what exactly does CRED do that makes it such a valuable startup? Let’s find out.

CRED’s Business Model

CRED’s founder Kunal Shah has kept the company as simple to operate as possible. The constantly growing startup works by partnering up with service providers that need more  customers  pouring into their website. In exchange for featuring on the “Discover” page of the CRED app, providers pay a small incentive to the company (more on this in a bit).

When you pay your credit card bills on time through the app, you get awarded  with CRED coins that you can use inside the app to purchase coupons or offers of all the companies that have formed partnerships with the fintech  giant. Apart from the Discover feature, CRED also has features like CRED Stash, and RentPay that are basically functions to make CRED the one place for all your financial needs.

CRED Stash is simply an added functionality that serves as an alternative to LazyPay or SlicePay – it gives users a near-instant loan of upto INR 500,000 at a very attractive interest rate.

Playstore Screenshots Cred App - 2

RentPay is another useful feature (although to a very small population), allowing users to send rental dues to their landlords through linked credit cards.

And that’s about it. The CRED business model is as simple as that. And yet people go crazy that such a simple idea would be so effective. And if you’re still in doubt on how CRED makes money out of this, it doesn’t. And we’re going to see exactly why.

Revenue Sources

When we said CRED doesn’t make money, we meant that it isn’t making enough to call itself profitable. At least not yet. In January, 2020, the company reported a cash outflow of INR 118 crores to bring in only INR 3 crores.

But for a startup that’s only 24 months old, you can’t expect much else. Even our analysis of Khatabook showed how startups – fintech startups even more so – need to spend a lot during the initial stages to gain momentum and scalability before bringing in the cheques. CRED isn’t different. It needs to figure out how to make money, so the cash burn can be justified. And the company is working towards this. CRED’s revenue sources are limited as of now, but they’re evolving, and you can bet Kunal is going to go full throttle really soon. For now, these are the revenue sources CRED heavily relies on:

Partnerships with Brands and Products

As we mentioned before, CRED partners up with different service providers to bring in valuable offers that hook users to make payments using its app. In exchange for doing this, and bringing  revenue to the service providers, CRED charges an  undisclosed amount. We’re guessing this has to be a commission based deal, accounting for the nearly 6 million  registered users on the app, attracting a pretty good sum.

Cred Brand Partners

CRED Stash

As discussed above, CRED Stash loans money to users at an attractive interest rate, and this interest, however small right now, makes for revenue towards negating the company’s losses.


RentPay offers users to pay their rents through their linked cards, seamlessly. Although not as popular, we do expect the feature to become more approachable in the near future. CRED charges 1.7% for this service currently, but this may increase or decrease with more usage/exposure.

Financial Data of Cred

Needless to say, 6 million users giving access to CRED to access their expenditures to analyse their spending habits equates to a lot of data. We’re not sure how Kunal will exactly leverage this data yet, but according to MoneyModels, the company can trade this data to financial lenders and institutions, who can use this data to advertise more relevant products to their customers. In an age where data equals power, we think this is entirely a possibility.

Presently, these are the revenue sources the company is believed to be deploying, and if things hold steady, CRED can soon expand to provide their own financial services like insurance, investment vehicles, and the likes. Considering it already has access to the credit patterns of 6 million users. Imagine the customised financial offerings CRED can offer to you. Not too ambitious for a behemoth of a startup like CRED, huh?

Funding and Investors

With CRED’s valuation now at $2 billion USD , we definitely need to know who’s betting their money on Kunal to lead the country towards an increasingly exciting future. With five lead investors and 21 other funders backing this crazy idea, CRED has secured about $256.5 million USD from five funding rounds, and is preparing for another one in the coming months. The major players include DST Capital, Sequoia Capital India, Sofina, and RTP Global.

Backed by some of the biggest players in the game, Kunal Shah’s CRED is really on a path of domination, and there is no noticeable competition as far as the eye can see.

Closing Thoughts

CRED is one of the fastest growing companies in the world today, and led by Kunal Shah, it’s a force to be reckoned with. The company is young, really quick with adapting to market changes, creates amazing products, and knows to have fun while doing it. All in all, we don’t think there are many companies like CRED that focus on customers as much, and we think a lot of startups are going to follow this route. The fintech industry is starting to pick its pace. Although still in its infancy, CRED’s investments are a mere glimpse into just how impactful this space is going to become in the coming decade.