Business Model

and Analysis
By Infinity Consulting
 Introduction

It is a Bangalore Based FinTech startup

Established in the Year 2018
Founded by the founder of “ Freecharge” Mr. Kunal
Shah
Main feature is to allow users to pay their credit card
bills
Reminders for timely payments
Customers are rewarded for paying their bills on time
Consumers receive credit points equivalent to amount
paid
These can be later redeemed to avail discounts and
vouchers
Only users with credit score greater than 750 points are
eligible to be a member.

01
 Problem statement

The credit card owners face a number of issues especially

if you are a multi-card owner
You have to take care of different billing cycles also hidden
charges and late fees
Annual interest rate on credit cards is 40-50%
App is aimed at helping the minority tax payers who are
helping in the development of the country
When you pay on time, you save a lot of money

02
 Features of Cred
Credit card management
You can manage multiple credit cards at one place.
Reminders
You receive bill due reminders so you don’t have to
keep track of different billing cycles and you do not
miss on timely payments.
Cred protect
You can enable CRED protect to be able to analyze your
statements and you are informed about the hidden
charges. You can also opt for auto-pay. Fill all your
details and Cred will pay on your behalf.
Rewards
Cred points equivalent to your payment (eg. Rs. 20000=
20000 cred points)
Redeem points
Cred points can be used to redeem vouchers and
shop on Cred app.

03
 CRED Business Model
CRED Stash –
Provides personal loans up to Rs. 5 Lac to cred users
Helps avoid long procedures & no documentation
required
Loan received within minutes of application
Collaborated with banks and currently working with
IDFC bank
Cred brings the right candidates and does loan
procedures
Gets 1% of the amount of loan passed as origination
fees for each transaction

Rent Pay–
Enables users to pay their monthly rent directly through
their credit cards
Amount transferred directly to the owners account
In return CRED charges 1-1.5% transaction fees

04
 CRED Business Model

Brand Partnership –

Solving Discovery and distribution problems of brands

Increases their visibility to customers

These methods are usually helpful in brand

engagement

There are 2 ways in which CRED earns in this:

a. Brand E-commerce platform “Discover”-

Various brand such as The man company, MIVI etc. are

listed

Brands are charged a fee for each product purchased

by the customers

b. Brand platform “Win” –

Brands such as One plus, Puma, Olay are listed on the

platform

Customers can directly make a purchase from the app

& can redeem CRED coins to pay

Avail 10-15% discounts using CRED coins

Commission ranging from 10-20% is received from the

listed brands

05
 CRED Business Model

CRED Pay–
CRED Pay – Pay with CRED points
One tap payment using saved credit cards
giving seamless payment experience
Partnered with Visa and Razorpay
Brands pay for getting listed on the app
Worked with 1300 brands till now
200 brands are active at a time

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 Supply Chain
The 5 main components that form the CRED ecosystem
CRED Ecosystem are:
1. CRED.

2. its customers i.e. credit card holders.

3. Brands listed on the platform to sell their products.

Customers Banks 4. Partnership banks such as IDFC first bank.

5. Credit checking bureaus such as CRIF and Experian.

CRED-Consumer-Bank-Credit Bureaus
Customers log into the CRED app and fill their personal
& bank details
Cred gets their credit score checked through the linked
banks and credit checking bureaus
Customers can be a member only if their credit score is
750 or more.
CRED – Brands – Consumer:
Brands are listed on the platform and customer
discovers them through the CRED app
Brands Credit Bureaus Brands pay commission to CRED to get listed and after
consumers make purchases.

07
 Phases a business goes through
This is the cash burn phase where in companies identify a problem,
in this case which was timely credit bill payments. Develop a
system which will solve the problem which is the CRED app, raise
money through investors and attract customers by giving them
different offers like CRED coins etc P1
Once customers find the services useful and convenient they do
not use their old methods.
Eg. In case of Jio as well they faced massive cash burn just to
acquire customers and get them used to the digital era

When the consumers get used to the new services and changes P2
brought about by way of new technology or features, consumers do
not prefer to go back to their old habits
Eg. After Jio made us habitual to using 1 or more GB per day we
cannot go back to when we used to use 1 GB for a whole month. P3
Similarly the ease of handling credit cards will entice customers to
use CRED hereon

Once a brand has acquired its customers and formed its customer
base it starts charging P4
CRED is only targeting the top 1% of the country who are rich and
are willing to spend which will help them generate revenue
CRED is yet to reach the 4th phase as it is currently aiming at
customer acquisition as stated by Kunal Shah
Their main focus is on not on revenue generation but on reaching
and acquiring relevant customers

08
 Marketing Strategies

Conceptual marketing
CRED sponsored IPL 2021 Introduced CRED Power Play

Using celebrity signature

along with some other brands cash back

moves to attract audience

such as Havells fans, Garnier 100% cashback for payments

E.g. Rahul Dravid- Indira nagar

Men etc. made during IPL matches

ka Gunda, Old cricketers in a

Increased brand visibility Increased app engagement

boy band etc.

Other modes

Instagram paid

advertisements

Shows during story views

Regular tweets

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 PESTLE Analysis
Political Economic Social Technological Legal
Since it is a The app focuses Age distribution Change in It operates in
FinTech platform on wealthy as very few technology compliance with
the primary customers so people especially Continuous NPCI (National
regulatory body their income young are aware improvement in Payments
for CRED is RBI becomes an of the know AI Corporation of
Therefore any important factor how’s of CRED Ease of handling India)
policy change by Interest rates Income groups the app
RBI will directly since it also since the Simple UI
affect it provides loans customers of Compatibility to
It has to abide by Inflation rates CRED belong to all devices
the IT rules set by because it affects higher income
the government the buying group
Dept. of IT behavior Money conscious
Taxation policies people use CRED
by government to savings
Payment
gateway rules
(Eg. Visa &
razorpay)

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 SWOT analysis
Strengths Weaknesses
1. Exclusivity & members only.
1. Marketing strategies.

2. Incentivizing timely payments.

2. Difficulty of understanding how
3. Eliminate hidden charges.
to use the cred coins.
4. Access to highly valuable data. S

T SWOT W

Threats Opportunities
1. Market saturated with FinTech 1. CRED Bank for the excusive
platforms.
O members.

2. Easy to implement idea. 2. Dating apps.

3. Platform to file taxes easily.

4. Insurance provider.

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 Ansoff growth matrix
Market Penetration Strategy:
This is about growing the current market
Since it was mentioned by CRED that they are not scaling based on
Existing Marketing

the number of users, they can encourage their current customers to

buy more from their platform
Market Product Focus on increasing Average Revenue Per User (ARPU)
Penetration Devlopment
Market Development Strategy:
Developing the market after new product has been launched
Identifying potential users e.g. most of the young and bachelors
stay on rent so they should be targeted

New Markets

Product Development Strategy:

Market Development of a new product after it is launched
Diversification
Devlopment In this case it is CRED stash, and RENT pay for which they can
collaborate with more banks so ease the process
Developing new features and update the technology

Existing Markets New Products Diversification

Launching new product in either new market for better
opportunities
New product launches such as tax filing or insurance for the
existing users
Addition of utility bill payments for new audience such as older
people

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 BCG matrix

High
Star Problem Child
Cradit card bill Brand discovery
payments platform for
Market Growth
shopping

Low
Cash Cows Pets (Dog)
CRED Stas
Data
monetization

High Low

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 Business Model Canvas
Customer
Customer

Key Partners Key Activities Value Proposition

Relationships Segments

Banks such as IDFC Understand user Social media Age group – 25-60 For Customers:
for CRED Stash behavior to give them Creative years old Free from the
Brands such as One better services by advertisements Income group - hassle of
plus, Blue Tokai giving them relevant Middle and upper managing
Coffee, The man Co. brand suggestions middle class people multiple credit
etc. Improve customer Multiple credit card cards at a time
Payment processing engagement o the
Revenue Streams holders Not missing on
partners like app People who have a credit card bill
Razorpay, Visa etc Commissions from focus on saving payments on time
brand listings money thus saving
Origination fee from money
banks Saving money by
Transaction fees shopping on the
from rent pay app with CRED
coins
Multiple payment
options to pay the
Cost Structure Key Resources Channels bill
Quick loans
Knowledge of
Marketing expenditure Interactive Mobile application hidden charge
Customer acquisition application Instagram paid ads
Brand development Secure cloud storage IPL sponsorship For Businesses:
R&D Community building (exclusive community of Solving discovery
Talent acquisition CRED members) and distribution
problem of
brands

14
 Porter’s 5 forces
The concept of CRED is relatively new in India
and so far there is only one competitor i.e.
MagicPin that provides rewards on bill payments

Competition

in the

Industry

This is a fairly new concept and Threat of

Although unique but the business

Threat of new

though the concept can be copied substitute

entrants
model of CRED is very simple
there aren’t substitutions for the products
Porter’s 5

therefore it can be easily copied and

services provided by them forces there could be entry of new players

Power of
Power of

customers suppliers

The platform is exclusive and not everyone can The main suppliers in CRED are
be the member hence there is not much banks and different banks.
bargaining power in the hands of the customer Changes in bank’s interest rates
In fact, customers try to improve their credit could be a deciding factor but
scores to be a member if CRED the company can easily switch
At a time 375,000 people are in waiting to be a to some other banks
part of the platform

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 Financial analysis

The company received funding as follow

2018- Seed funding by Sequoia Capital
2019- Series B funding Sequoia Capital, General Catalyst etc
2020- Series C funding by DST Global, Ribbit capital & Sequoia Capital
2021- Series D funding by DST Global which took the company valuation to $ 2.2 Billion.

16
 Financial analysis

In the financial year 2020 the expenses of the company sky rocketed and increased by
492%
As the company had collaborated with IPL by sponsoring it also brand endorsements
and creative advertisements with famous celebrities and cricketers increased the
expenses
In the financial year 2020 the company spent 378 cr. Rs. in expenditure and earned a
revenue of only 52 Lakh causing it to spend Rs. 727 for every rupee earned

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 Conclusion
Even after such cash burn, why are investors still investing in the company?
The major reason behind this is the crucial data that CRED is collecting of their users
CRED has the data of the rich 1% people who are not only good with money but love their credit
cards and are wiling to spend
These people get to join CRED only when their credit score is above 750 points which means they
pay their dues on time
CRED not only has their financial data but also knows about their spending habits, although CRED
has not monetized this data yet but this data is crucial for e-commerce companies who can use
this data to analyze buying habits of these customers and recommend them products based on the
same
In India one in 20 people uses a credit card but in foreign countries such as USA on average 1
person has 4 credit cards which is un untapped market where CRED can expand
There are about 50mn credit card users in India of which 30Mn are the active users and Kunal shah
wants to target these customers only. He has already acquired 6 Mn of those which is more than
20% of the total.
Suggestions:
Since the advertisements of CRED are not understood by the masses, they can create ads that will
help people understand what CRED is all about

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 Thank you

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