Case Study

Cred’s Business Model, 5 Unique Sources of Revenue

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Cred’s Business Model

Cred always be in limelight, sometimes because of its interesting marketing strategy, sometimes because of high valuation, which is also a question ‘Is It Overvalued?’ And sometimes because of the entrepreneurial hero “Mr. Kunal Shah”, the founder of Cred.

Kunal Shah, Founder of Cred

Kunal Shah is considered the hero of the entire Indian startup ecosystem. That is why everyone wants to have a look at Cred’s Business Model.

What are the revenue sources through which ‘Cred’ earns? This is the most common question people search for and we are here with the answers.

In this article, we are going to cover

  1. What is Cred?
  2. What is the Cred’s Business Model?
  3. 5 Unique ways through which Cred generates its revenue.
  4. Future Plans of Cred
  5. Why is it attracting huge Investments?


Before we begin let’s have a brief introduction of Cred.

It is a Fintech startup and was started in the year 2018.

Currently, it is valued at $2.2 Billion i.e., Rs. 16111 Crore. In the FY2020 cred’s earning was Rs. 52 lakhs but to earn that amount he had to incur Rs. 378.4 Crores.

Means he had to spend Rs. 727 to earn A Rupee.

What Does Cred Do?

Cred helps Credit Cardholders to pay their bills within the specified time limit. It rewards you to pay that through Cred Coins which you can redeem to buy other items from the partner Merchants.

But what is the main problem that Cred is solving?

The problem is, if a person has multiple credit cards it becomes difficult to remember the dates of repayment, and the high interest as a late fee becomes a burden on us.

Now Cred asks you for Email access and it repays your credit card bills automatically so that you don’t have to bear high-interest charges.

But it is not the actual revenue source through which Cred earns money.

Also Read: 7 Schemes by Government of India for Startups

Cred’s Business Model

Cred's Business Model

There are 5 Unique ways through which Cred generate its Revenue

Cred Stash

In simple words it helps you to get personal loans with the help of your credit cards.

To get a loan we used to go through a time taking process, have to submit various documents, and have to show them collateral.

Cred changes the poor experience into a very easy and simple process.

People having credit cards earns a good amount of money and to use Cred App we must have a credit score of more than 750.

A person can only have a credit score of more than 750 if he has paid his previous loans on time and has not defaulted in any payment.

It increases the assurance of timely repayment of loans.

Its process is as fast and easy that within 2 minutes only you get the amount of loan in your bank account and you don’t have to submit so many documents.

To provide loans Cred has partnered with banks and it acts as a middleman between banks and Ideal Candidate.

Cred gets an Origination fee of around 1% from banks for bringing the best candidates.

Rent Pay

You can pay your rent via your credit card using the Rent Pay feature of Cred.

Cred charges 1%-1.5% transaction fees for the same.

Cred claims that they have processed the Rent Payment of around 50 crores till now if we calculate they only made around Rs.50 Lakh-Rs.75 Lakh before deducting any other payment gateway charges etc.

If you will observe these two revenue sources cannot bring a good amount of revenue, so why it is included in Cred’s feature?

The main use of these two features is to garner more users on their platform and increase engagement.

Partner with brands

Nowadays so many D2C businesses have entered the market, these businesses sell their product directly to consumers through their website or via Amazon or Flipkart.

Usually, their product is of good quality, but they face problems in marketing and in searching right customers.

As we all know Cred users have the highest spending capacity and are premium users and here Cred helps them in marketing their product or services by listing them on its platform.

Cred Earns through two ways

  • E-Commerce Platform, “Discover”: If you are a user of Cred, you get to know about different brands like “The Man Company”, “MIVI”, “BLU TOKAI”, etc.
  • Brand Platform, “Win”: Where you can buy the product listed there and Cred gets a commission on each sale. On this platform, Cred has listed some big brands as well like “One Plus”, “PUMA”, “OLAY” etc.

You get a discount as well while playing some interesting games.

Till now Cred has worked with more than 1300 brands and around 200 brands remain active at a time.

Also Read: How an Indian Women revived Vimeo that was at the bank of shutting down

Cred Pay

Cred has partnered with companies like “Man Matters”, “The Man Company”, and if you want to buy their product, you can use Cred Pay.

It is a ‘One Tap Payment Method’. The payment is done via your Credit Card and you can use Cred Coins as well to get a 10-15% discount.

For that Cred uses the payment gateways services from Visa and Razorpay.

Gradually they will partner with more brands that can boost their revenue in the future.

Selling its Own Product

Now Cred has started selling some of its own products as well like filters and masks.

These were the 5 Major Revenue Sources of Cred

Future Plans 

By looking at Cred’s Business Model and Revenue Sources, it is clear that this is not enough to show future growth. So, the next question that comes, What are the Future Plans of Cred?

Many MNCs want to establish themselves in India because of its high population, but Kunal Shah realized although India has highly populated there are only the top 25 million people who are intensive buyers.

Remember being only rich does not qualify this condition because sometimes even rich people don’t spend that much.

But now cred has all the data of its users through which it can analyze the buying behavior of the people who have the highest buying capacity in India.

Currently, Cred is focusing on distribution and acquiring more and more customers so that in the future it can sell some financial products like Insurance, Investment Instruments, Loans, etc., and some products through its E-commerce platform as well.

The founder of Cred, ‘Kunal Shah’ says that Cred is a Lifestyle Company and not a Fintech Company.

So, this is Cred’s Business Model and some of the options that Cred can use to generate more revenue in the future.

Hey I am Vaibhav, a CA student and a startup enthusiast who write about startups and on financial topics

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