CRED Success Story: Business And Revenue Model

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CRED Success Story

Earlier we used to follow the barter system to purchase anything, be it a service or a good, where we had to pay some values in return. With the emergence of paper money issues steadily started to resolve on their own but another problem arose that the people always didn’t have enough to pay for something. This problem has now easily been solved by introducing credit cards that people use to buy in advance and pay off the due later.

The concept of credit is not something very new. Credit is absolutely necessary when people are unable to invest with the available capital and can’t support certain investments, in this regard credit card has made life easy for many customers. However, the payment cycle of credit cards varies from each other which is very difficult to manage and remember. To prioritize and pay credit bills Cred came forth with the idea to help the credit card holders to provide a pleasant experience to pay off their credit card bills on time.

Cred- About

Cred established in 2018 is an application for its users to pay off their credit card bills, facilitating with lucrative rewards. The sole purpose of the platform is to make credit more accessible and affordable.

The application is straightforward to handle, it just requires the users to give access of their phone number to the app to inspect their credit score. If the user has a credit score of 750 or more only then they are granted access to the CRED app. The app reviews all the credit cards linked to the respective phone number.

When the user pays their bill, the app provides them with CRED coins which they can use in the future to buy in-app curated products.

About the Founder

Kunal Shah

Kunal Shah founded CRED and is also the CEO of the company. Born in Mumbai in 1983. Kunal completed his graduation from Wilson College in Philosophy after he went on to pursue MBA, but he dropped the course midway. Cred was his second successful venture Freecharge being the first. His first venture FreeCharge was acquired by snapdeal back in 2015 yet Kunal worked as the CEO. His second venture CRED was founded in 2018.

Business model

CRED rewards its users for paying bills, they have partnered with many businesses to provide offers to the users. As a result, the users get more attracted to using the app.

There are 3 elements of CRED’s business model: Customers, the app, and the registered businesses

  • Customers
  • CRED app
  • Listed businesses

In order to register for CRED programs, a credit score of more than 750 is a must. To make it more attractive CRED provides incentives, and coins that can be redeemed later. In return, businesses get a good share of exposure to buyers and they also get benefitted. The best part for the business to be on the CRED platform is that it provides each business be it small or large alike visibility as the buyers’ pool is huge.

Revenue Model

One may question if CRED doesn’t charge a fee from the users for bill payments, then how do they generate revenue? For the revenue, part CRED has two ways, they charge from the listed businesses and they charge financial institutions for the data of the users.

Listing fees

  • CRED partners with businesses to provide the offers.
  • User receives CRED coins as a reward for bill payment, that the users can redeem with any available offers.
  • CRED charges a fee from the businesses each time a user redeems CRED coin for in-app purchases from any given business.

Data monetization

  • CRED collects financial data from its users to provide them with new offers in the future.
  • Many financial institutions, like banks and credit card companies pay a fee to CRED to access these user data.

Funding and Investing

From the latest funding round CRED has raised about $80 million (Rs 617 crore approx.) according to the Ministry of corporate affairs. In a mix of a primary and secondary deals, the company is reportedly raising a sum of $140 million which will give CRED a valuation of $6.4 billion.

This round is led by the GIC of Singapore and co-investors are – Sofina, Tiger Global, FalconEdge, and Dragoner.

In October of last year when the firm raised $250 million it was valued at $4.01 billion.

In December 2021 CRED acquired Happay an expense management firm, to enter the expense management segment. It also acquired liquor delivery start-up HipBar to get the license for prepaid payment instrument.


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Ayan Mondal