Hello readers!! Do you also have crazy ideas stuck up inside your head? Don’t worry have patience and believe in your ideas as they can do wonders. Do you really dream of running your own company? Want to be the leader of a team? Then you are at a perfect place to learn and explore one of India’s top leading fintech startup-CRED Business Model. You will be learning how much hard work, dedication, and patience it takes for almost all startups to grow and how they overcome hurdles that come on their way to achieve their goals.


CRED was founded by Kunal Shah in 2018 who is famous as a serial entrepreneur and investor. He was the earlier founder, CEO of freecharge. Later on, he sold freecharge to snapdeal for about $450 million in 2015. He never believed in failure and that’s the reason He soon started working on CRED.

CRED is a fintech startup that is based in Bangalore, India, and was founded in 2018. In just 2 years, CRED in 2020 turns Unicorn, raises $215 million at a valuation of $2.2 billion. The company seeks to provide incentives to credit card users to pay their credit card bills on time. This is achieved through rewards of financial value being paid every time. Finally, customers will also get access to a wide range of credit and products from leading brands.

CRED has received a huge amount of funding in the three short years that they have been operating. This funding stands at $471.2 million and was raised by a group of 28 different investors, which includes the American company, Insight Partners. Rewarding people for managing their finances is a good USP and these investors clearly believe that also.

CRED Business Model - The Most Popular Fintech Startup CRED-1-getinstartup


1. Bragworthy proposition

To convince target customers to buy or use your application. For that, they started a reward system for those who complete an initial credit score of 750. This in turn helped team CRED get a huge user base of about 64 lakhs. Bragworthy Proposition basically brings an irreversible change in the mindset of a user towards a particular company. This technique tends to fulfill customers’ willingness and the reward system can also attract customer’s interests.

2. Funding before product launch

They were able to raise an amount of 220 crores from investors which is really a big deal. One of the top leading investors for cred was Sequoia with $120 million with a 12.68% stake.

Cred has incurred a loss of 63.90 crores in the financial year 2019, 378.89 crores in the financial year 2020. You might be surprised that how CRED managed to get more funding despite the fact that it was already running on loss?

They all extensively worked on altering the behavioral design of society and the anticipation of society helped them to make the billion-dollar company. This golden strategy works on 4 discrete steps:

Cash Burn:

The company identified the major problem of society and tried to overcome conventional methods to go to banks to make credit card payments. It designed a system to fix the problem. After that raised a million dollar funding. At last, they enticed the customers by giving unbelievable offers. That’s how CRED Business Model was designed to maximize its userbase without even bothering about the profits. They tried to understand their customer grievances like hidden charges, late fees(forgetfulness), extra interest.


People with 2 or 3 credit cards found it so simple to use CRED that they stopped using the conventional method wherein they have to go through a long list of statements and put in efforts to see if hidden charges are applied or not.


Credit card users no longer have to remember the due dates. Irreversible change in consumer’s behavior such that they never want to go their past system.

Revenue Model:

They planned to design their revenue model in such a way that today it has accumulated its dream customers that are the richest 1% of the population.

3. Credibility

In spite of all the loss CRED bore they have established a premium quality user base. They have gained 95% customer satisfaction by giving a 1000 credit score on credit card payments of 1000. Nothing better than this can happen even if we look from the customer’s perspective and for team CRED also it was beneficial as they have gained the trust of their 64 lakhs customers. That’s why cred has more than 10,000 crores transactional volume.

Taking care of customer’s interests they have focussed on UI/UX design as it becomes easier for customers to use it.

4. Planned futuristic revenue model

Now that CRED has a database of the top 1% spendthrift people across the world. Now their main focus should be on expanding their business.

Now that they have a well-established startup their plan is to provide consultancy to new businesses to launch their product inefficient manner. They are going to charge for sales pitching too. They work upon getting commissions from brands. They can launch their own merchandise. They can diversify their domains in various fields like rent/shopping/loan/insurance/real estate etc.


CRED Business Model was designed in such a way that it first attracts customers by providing them credit scores as rewards. After that, the customers have a trustworthy relationship and they use CRED more frequently. This helped CRED grow more as a fintech startup with a huge user base.

To know more about Startup Ideas read:

Top 6 Innovative Startup Ideas 2021 Everyone Should Know

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