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CRED Makes Some Noise

Updated: Nov 4, 2021

In the latest OH MY GOD Events, we have Fintech Startup: Cred turning into a Unicorn in just 3 years from inception!

In simple terms, Cred gives rewards to its members for paying their credit card bills on time. The last time we were valued for encouraging ‘good behavior’ from a crowd was when we were monitors in our schools and our value was “Such a good boy!” (Not frustrated).

For the sake of the newsletter:

Cred’s valuation jumped from $806 million to $2.2 billion in a span of just THREE months (Read that again).

For the sake of our sanity of mind:

While it’s too early for business wizards to take a deep dive into this leap in valuation, here’s our list of what makes sense (in descending order):

  1. Between January and April, Cred must have closed deals with some major e-commerce sites to allow payments through CRED-pay (CRED-pay allows CRED members to use CRED reward coins for making payments), an idea flagged off in Dec’20.

  2. The investors must have gotten hold of the report (obviously) that says that its Topline is expected to zoom by 208 times, taking it to INR 108 Cr in Fy’21 from INR 0.52 Cr in Fy’20.

  3. Revival of the economy must be implying rising credit scores, allowing more people to join the elite CRED club (For CRED membership a credit score of at least 750 (which is a lot) is mandatory).

  4. Kunal Shah, the founder, must have pitched another cool idea on how to monetize its high-value user base: made up of upper-income youngsters and white-collar professionals.

  5. Investors were awestruck that CRED could bring out the dark side of RAHUL DRAVID (Big Deal, really!). See evidence here.

  6. The investors must have foreseen Elon Musk tweeting something like “Download Cred”.

The Upside

As per, the Indian credit card industry is expected to grow at a CAGR of 25% between 2020 and 2025. Most striking statistic: while there are 320 cards for every 100 citizens in the USA, there’s only 3 cards per 100 citizens in India.

CRED already controls 22% of all credit card payments made in the country with its user base of 5.9 Mn as on Jan’20. With such numbers on the deck, CRED is sure to bloom, provided it continues to enjoy a lack of competition.

The Big Question

While having a high-value user base definitely implies higher and faster monetization rates, it also means increased sensitivity to Data Security, Brand image, and Comfort of use. One data leak/one bad news/one system breakdown could lead to one more Startup struggling to succeed. How Shah uses the $215 Mn to build a lasting trust in its coveted club, will be make or break for the 3 years old CRED.


This article is a part of the April'21 edition of our Startup Newsletter. Here's the complete publication:


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