Disclaimer:
This blog is an independent analysis written for educational and storytelling purposes. It is not affiliated with or endorsed by CRED, its management, or its investors. All facts and figures mentioned are drawn from publicly available information. All views expressed here are the author’s personal interpretation of public data, intended solely to share insights and learning, not to critique or misrepresent any individual or organization.
PhonePe became a unicorn in 3 years, BharatPe in 3 years, Groww in 4 years, and CRED in just 3.
Seeing this pattern, people assume that launching a fintech startup will make them a billionaire in under five years.
Here’s a reality check: India is home to more than 10,000 fintech startups. Every niche in this space is already dominated by three or four major players, the margins are razor-thin, and it’s nearly impossible to stand out without a truly unique differentiator.
Every day, a new fintech app enters the market, burning investor money to offer cashbacks and rewards, hoping users will stick around. But when the cashbacks end, the users move on.
So why are startups doing this? To acquire users fast.
The mass market is already captured by PhonePe and Google Pay. For new players, cashback is the shortcut to attention. But can this model work in the long term? Mostly, no.
The business bleeds cash, the rewards shrink, a new competitor enters with fresh funding, and the cycle repeats until the company collapses or raises again.
Yet there’s one bold startup that has built an empire on this same model and turned it into a billion-dollar business.
The company that became a unicorn in three years, touched a $6.4 billion valuation in 2022, posted a loss of ₹1,604 crore in FY24, saw its valuation drop to $3.5 billion in 2025, and still managed to retain investor faith.
Meet CRED, India’s boldest fintech bets.
The Start of Kunal Shah
CRED’s story begins with Kunal Shah, one of India’s most respected product thinkers. Before CRED, he co-founded FreeCharge in 2011, a platform that made mobile recharges rewarding. Snapdeal acquired it in 2015 for $400 million.
Kunal believes that products capable of driving irreversible behavioral change build the strongest moats. That philosophy became the foundation of CRED.
The Credit Card Opportunity – The Birth of CRED
Credit cards have always been a love-hate relationship for Indians. A single missed payment can tank your credit score, so many avoid them entirely. Others use them heavily and default often.
Neither of these groups can use CRED.
Why? Because CRED was built exclusively for people with a credit score above 750.
Kunal identified a gap in this elite segment. People with multiple credit cards had to juggle multiple bank apps to make payments. Those apps were slow, cluttered, and far from premium.
The top 10% of India’s credit users control 70% of the country’s spending. They’re disciplined, aspirational, and data-rich, but under-served.
CRED was designed for them.
It transformed the boring act of paying bills into a rewarding, exclusive experience. Only users with high credit scores could join. Once in, the app tracked your payments, spending habits, and repayment consistency essentially, how trustworthy you are with money.
Every payment earned users CRED coins, redeemable for offers and premium products.
Unlike most fintechs that chase large markets, CRED focused on the right market. PhonePe and Google Pay may have over 140 million daily users, but CRED’s 13 million are the top spenders.
CRED’s total market may be smaller, but its users represent disproportionate value.
It built a community of credibility, a place where every transaction and every member reflects trust.
The Business Model – Where the Money Really Comes From
If you build a mass product, where do you advertise? On TV, on social media, on banners, basically, everywhere there’s a huge crowd.
But for a premium brand, the audience is different. They are selective, hard to reach, and harder to impress.
CRED fills that gap. It is not just an app; it is a premium community. A space where people with credibility are rewarded. Users get cashback, rewards, and most importantly: exclusivity.
So how does CRED make money?
CRED’s business model runs on three main pillars.
Pillar 1: The Payments Ecosystem
CRED stores all the credit cards of a user in one interface and ensures timely reminders for bill payments. For every credit card bill paid through CRED, the company earns a small commission from the card-issuing bank.
Now, here comes another feature, CRED RentPay. This allows users to pay rent through CRED using credit. It helps users in tight cash flow situations because rent is a high-ticket monthly expense. Through RentPay, one can pay rent instantly and clear the credit later within 30-45 days, essentially a short-term, interest-free credit option, with only a small processing fee of 1–1.5%.
But here’s the catch, people started exploiting the feature. Users began sending money to their own second accounts or to friends, enjoying both interest-free credit and cashback.
Is CRED aware of such misuse? Of course.
In September 2025, the RBI halted the ability to pay rent via platforms like CRED to curb such loopholes.
However, this isn’t the end of Pillar 1.
CRED also launched CRED UPI. Now, why would a company enter a market already dominated by PhonePe and Google Pay?
Simple. Paying credit card bills is a once-a-month activity. But to build a product that people can’t leave, it needs to be part of their daily life. UPI creates that daily habit. Even though it’s a free feature and doesn’t directly bring revenue, it brings something equally powerful: user data.
Data about spending patterns, behavioral traits, and lifestyle choices.
And in fintech, data is everything.
Pillar 2: Credit & Lending (CRED Cash and CRED Mint)
This is where things get interesting and where most of CRED’s revenue comes from. In fact, Pillar 2 contributes to more than 50% of CRED’s total revenue.
Here, CRED serves two types of customers, borrowers and lenders.
Let’s start with the borrowers.
CRED Cash:
CRED Cash offers instant short-term credit lines to users. Within minutes, a user can get access to credit if they meet the eligibility criteria. The decision is made through CRED’s algorithm, which analyzes user data, credit history, repayment behavior, and spending patterns.
Now you might ask, “Why would someone with a 750+ credit score take a loan from CRED when banks offer lower interest rates, like 9%?”
Good question.
Yes, banks might offer lower rates, but getting a personal loan from a bank takes time from 2 to 7 business days and requires salary slips, statements, and sometimes physical visits. CRED solves this with speed and convenience. It provides instant liquidity without paperwork in minutes.
But here’s where the RBI’s 2022 digital lending guidelines come in.
Under this rule, only licensed NBFCs and banks can actually disburse credit. That means CRED cannot lend money on its own. All the loans you see on CRED Cash are issued by RBI-regulated partners like IDFC First Bank or Axis Bank. Every loan is recorded on the NBFC’s balance sheet, and funds move directly from the NBFC’s account to the borrower and never through CRED’s accounts.
CRED acts purely as a Loan Service Provider (LSP) facilitating discovery, user experience, and transparency. It earns a 1–2% commission for every loan disbursed. The NBFC takes the rest of the interest.
Now, why did the RBI introduce this rule?
Between 2018 and 2022, several fintech apps offered loans at 20%+ interest rates, demanded access to personal data, and harassed users for defaulting. Many of these apps were foreign-run and unregulated. The RBI wanted to clean up the space, enforcing transparency and protecting users.
So today, when a user applies for a loan, CRED’s system checks eligibility. If approved, the NBFC disburses the loan, and CRED earns a small facilitation fee. If the user defaults, the NBFC bears the loss, not CRED.
CRED’s biggest role here? Finding the right people who can pay back.
That’s why its algorithms go deep into user behavior, spending, bill payment timing, and credit health, before recommending any credit line.
Now, what about the lenders?
CRED Mint:
CRED Mint was designed for users who wanted to lend money, not borrow it.
Here’s a question, how much do you earn from a Fixed Deposit? Around 6-7%, right?
CRED Mint promises up to 9% returns annually. Sounds exciting? It is.
It’s a peer-to-peer (P2P) lending model. If you invest ₹1 lakh in CRED Mint, the partnered NBFC (Liquiloans) disburses that amount to verified CRED users are people with high credit scores and strong repayment behavior.
The borrowers pay higher interest rates, and CRED takes a percentage commission on the transaction and the rest 9% will go back to the investor.
This entire system runs on trust between users, NBFCs, and the CRED brand itself.
However, since it involves public funds, the RBI closely monitors such P2P operations. It set key restrictions:
- A person can lend a maximum of ₹50 lakh across all P2P platforms.
- CRED cannot pool funds; each lender-borrower match must be transparent.
- All money must be managed by banks and trustees.
If CRED’s Mint ever scales to hundreds of crores in lending, the RBI could tighten regulations, further adding reserve requirements or stricter caps to protect lenders.
Both CRED Cash and CRED Mint operate within these strict frameworks, and while it limits flexibility, it also strengthens credibility.
Pillar 3: Wealth & Lifestyle
Once CRED built a community of affluent customers, it became a goldmine for premium brands. Reaching these customers elsewhere would cost brands heavily, but on CRED, they’re just one click away.
CRED launched CRED Store, a marketplace where premium brands list their products. Users can redeem their CRED coins to shop, get discounts, or claim rewards. In return, brands pay CRED for listings, placements, and commissions on sales.
In a nutshell:
Pillar 1: Solves payments, earns small commissions, and gathers rich user data.
Pillar 2: Uses that data to drive lending and is the major revenue driver.
Pillar 3: Monetizes its affluent community through brand partnerships.
CRED doesn’t rely on one single source of income. It’s building an ecosystem where every product feeds into the next. Data, habit, and trust, forming a cycle that keeps the user locked in and the brand alive.
Investor Love – The Valuation Game
In 2022, CRED was valued at $6.4 billion, and you know how much it’s valued now in 2025? $3.5 billion.
Wait, what? Yes, its valuation dropped by nearly 45%.
But here’s the twist – investors aren’t leaving. In fact, they’re still doubling down.
Why? Because they’re not betting on short-term profits. They’re betting on the long game.
CRED made a loss of ₹1,604 crore in FY24, but its revenue grew by 66% to ₹2,473 crore the same year. So while it’s losing money, it’s also scaling revenue aggressively.
Valuations in startups are often based on future potential, not just financials. CRED’s dip in valuation reflects correction, not collapse.
Why are investors still trusting CRED?
It’s because they see what others don’t, the power of its user base.
CRED’s audience isn’t the masses. It’s the top 10% of India, the financially disciplined, high-spending, credit-savvy users. This audience drives nearly two-thirds of the country’s consumption.
Imagine being the one platform managing their financial lives from credit, wealth, rewards, lifestyle all in one ecosystem. That’s what investors are visualizing.
Do you know the American Express story?
AMEX is a premium card, and only people with high networth and income can be able to use it. It is valued around 270 billion dollars. They targeted the most lucrative market, that consumes more than an average consumer. So technically the market size is small, but the market share is large. CRED has the potential to be that in India.
Kunal Shah has earned a reputation as one of India’s sharpest product thinkers. His previous success with FreeCharge and his consistent emphasis on behavioral insight make him a rare founder who understands both psychology and business. Investors are backing his vision.
Kunal often references Amazon, how it took nearly two decades to reach profitability. Every loss, he says, was an investment in scale, trust, and habit. CRED’s story is similar. Its losses are not burns; they’re building blocks for infrastructure, data, and a premium ecosystem.
So even with a dip in valuation, investors haven’t blinked. They see CRED as a platform burning cash today to build the rails for tomorrow’s financial ecosystem.
CRED might not be profitable yet, but it’s creating something far more valuable, trust, exclusivity, and habit.
And that’s exactly what the investors are betting on.
Critics vs. Defenders – The CRED Identity Conflict
Every great startup ends up in a tug-of-war between believers and skeptics.
CRED, after all, has become the fintech world’s favorite paradox, a company that loses money yet gains prestige.
The Critics:
Critics argue that CRED today suffers from an identity crisis.
What started as a simple, elegant idea, rewarding people for paying their credit card bills, has now expanded into a patchwork of products: UPI, RentPay, Mint, Store, Travel, and Wealth.
They claim CRED no longer knows what it truly is – a fintech, a lifestyle brand, or a super-app experiment.
To them, this horizontal sprawl shows a lack of product-market clarity.
CRED’s core audience, the top 10% with high credit scores isn’t large enough to sustain so many verticals.
Its 13 million active users may be affluent, but they aren’t necessarily active across all CRED products.
Looking at the losses, Critics say this isn’t scaling, it’s spreading thin inflated by branding and investor optimism, not fundamentals.
They argue CRED is running multiple experiments hoping one will stick, instead of deepening its strongest moat, the premium credit experience.
CRED once sold discipline as luxury. Now it’s selling everything as CRED.
The Defenders:
Defenders, on the other hand, believe this chaos is deliberate evolution, not confusion.
They argue that CRED isn’t a payments app, it’s a trust network in motion.
Each product from CRED UPI to CRED Cash to Mint, is a spoke in a bigger wheel:
“To own the financial life of India’s most trustworthy users.”
They point out that CRED’s user base isn’t about quantity but quality, 750+ credit score Indians who drive 70% of urban consumption.
If CRED can own this elite segment’s data, habits, and loyalty, it can monetize it through credit, wealth, and brand partnerships for decades.
They see the losses as long-term infrastructure investment, not failure, similar to how Amazon, Uber, or American Express built scale before profits.
For them, Kunal Shah’s vision is about compounding trust, not chasing Gross Merchandise Value (GMV).
“CRED isn’t confused, it’s connecting the dots before the rest of us can see the picture.”
The Middle Ground:
Both sides make valid points.
CRED’s brilliance lies in its ambition, but ambition without focus can blur even the sharpest brands.
Its next challenge isn’t launching new features, it’s proving that trust can translate into sustainable revenue. The challenge is to find the right feature and doubling down on it.
The Learnings – What CRED Teaches Every Founder
Every startup story leaves behind valuable lessons – you just need to look through the right lens.
CRED might seem ambitious to some and chaotic to others, but one thing remains undeniable: its ambition.
Let’s look at the four biggest takeaways from CRED:
1. Build for Emotion, Not Just Utility
CRED didn’t just make paying bills easier, it made the act of paying bills aspirational. It turned a mundane financial chore into a status symbol.
People can proudly say they’re CRED members in professional circles, not because of cashback, but because of the brand’s emotional appeal.
2. A Niche Audience Can Build a Massive Brand
Many founders believe that to build a unicorn, you must target a large TAM (Total Addressable Market). CRED proved otherwise.
In an ecosystem obsessed with scale, CRED demonstrated the power of depth over breadth. It focused on the top 10% of India’s financially disciplined users, a small but powerful segment that influences 70% of spending.
3. Data Is the New Compounding Asset
CRED’s greatest strength isn’t just its brand, it’s its data. The company’s future depends on how intelligently it uses that data.
Every transaction, every behavioral pattern, and every financial action compounds over time, giving CRED insights that can predict user intent better than any survey or traditional system ever could.
Data, when used right, doesn’t just inform decisions, it creates an unbeatable moat.
4. Growth Without Focus Is a Double-Edged Sword
CRED’s biggest challenge is also its biggest lesson. Rapid expansion without a clear moat can spread the business too thin.
In the pursuit of being everything to everyone, even the strongest brands risk losing their identity. CRED needs to move from mass experimentation to strategic precision, shifting its focus from user acquisition to product depth.
Its next phase of growth must be about clarity, not chaos.
Conclusion
CRED’s story isn’t over, it’s just getting started.
In a few years, it has built a brand that resonates with both the masses and the elite, earned trust from banks, NBFCs, investors, and users, and created one of India’s most recognizable fintech names.
Now comes the harder part – focus.
The road ahead will be bumpy, unpredictable, and demanding. But with Kunal Shah’s experience, clarity, and unwavering ambition, there’s every reason to believe that CRED will evolve into something even more powerful.
Here’s to the journey ahead. To CRED, its team, and the ambition that started it all.
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