Losses and Growing
A startup which we recently got to know about in September last year during the 13th edition of IPL, a heavy marketing campaign by the company made its presence digitally in the mind of people. An application that manages all your credit card dues and pays back for the bills paid through that in form of vouchers. Kunal shah the founder and CEO of CRED has some uniqueness to convenience the investors and out of the box, thinking due to which company is still surviving. The company’s expenditure surge by 492% in the previous year and revenue was barely 50 lakhs. But with so little revenue the company still stands strong and has a very good amount of funds for running the business. So, what do you think any company can survive with much less revenue? What the company exactly trying to do in spite of poor response from the people which was definitely less than expected. The two venture capital Coatuge Management LLP and Falcon Edge Capital are the main investors in the company. CRED has a valuation of $2.2 billion.
CRED was launched in back 2018 and the company claims to have over 59 lakh members, which is too less as compared to the marketing campaign. The company was almost there in the eyes of every cricket fans and after that, they have still maintained to be there and growing.
Now the part comes, what makes CRED so valuable while there is barely any revenue?
The answer is just simple the user base and relations that cred has build with their customers, the country has over 140 crore population with which 5.75 crore credit card and 8 crore debit cards, cred has managed to capture 60 lakhs out of them which is almost 20% of the total. Most of the customers of cred has credit score more than 750 which means the high spending capacity, cred has a very good knowledge about the interest of these people based on the offers they claim with cred coins, customers base with high spending capacity means cred can sell them any thing they want in future like other financial service, luxury items or trips as they have build a trust with their customers. The true value of the company is increasing customers and the spending capacity is the X-factor for the cred. the visionary leader Mr. Kunal shah a great mind which understands capitalism and what the market behaves for rich and poor. he was often seen in interview talking about taxes so there is a possibility of cred expanding that side. he is trying to make cred members habituated with their service and after that he can sell anything to his members . he has also included artists, musician, comedian and even a youtuber considering that they understand the consumers better and in a two dimensional way.
To know how unique is cred let me give you an example, in the initial days of cred the team send a cake to one office and told to give the cake to everyone and when the people in office asks what was the cake for then the word of mouth communication worked for them. So the company knows what to sell to whom and how to sell that. But the biggest competition of cred can be the big digital payment giants like Paytm and Google who already have a consumer base and also are into the business of financial services it won’t take mush time for them to add a feature similar to cred and they have a greater connection with the banks in India. So cred needs to keep an eye on that too.
