Is CRED Finally Cooking?

From travel to ecommerce to vehicle management and its core fintech products — the CRED universe is expanding rapidly. In fact, the recent launch of ‘CRED garage’ took most of the ecosystem by surprise and many are left asking why.

Revenue is of course one part of it, but there’s a clear demographic shift happening in the core audience of credit card users. More and more new credit cards are being issued and these users are not the premium users that CRED typically caters to.

TAM Grows

The total number of credit cards issued is close to touching the 100 Mn mark, as of August 2023. This number was 57 Mn in August 2020, so the CRED’s primary audience of credit card users or premium users in other words is becoming a little less premium.

The growth is fuelled by the long tail of ‘low value’ credit card holders. This is the base that CRED wants to reach because ultimately the vision is to target users that are already monetisable.

Travel and ecommerce are ways to capture a big slice of the credit card spending that its primary target users are most habituated to. This was a way for the company to retain a chunk of the credit card spending.

Reports this week indicate that CRED is instead going for a high-volume play on the ecommerce side and is moving away from its thus far exclusive focus on premium D2C products.

Make no mistake, CRED is still a premium app, but perhaps it’s becoming a little more loose with velvet ropes.

Payments Push Pays Off

CRED has pushed hard on marketing itself as an all-in-one spot for payments and credit cards to become the first port of call for many of these new users. UPI is by no means a premium monetisation play, but CRED is going for this in a big way too.

CRED is fourth on the most used UPI apps, behind PhonePe , 谷歌 Pay and Paytm . As per the NPCI data, UPI logged more than 1,000 Cr transactions in August 2023, out of which CRED processed 8.5 Cr transactions, but this is 2X higher than the 4.2 Cr transactions it saw in April 2023.

Besides this, the fintech unicorn is looking at expanding and casting a wider net for its lending products.

Revenue Needle Moves

This finally brings us to the big piece of news around CRED this week, which was the company’s FY23 financial performance. The startup reported a total revenue of INR 1,484 Cr in FY23, a 251.6% increase from INR 422 Cr in the previous fiscal year.

On the other hand, losses grew marginally at 5% to INR 1,347 Cr, thanks to expenses growing to INR 2,831.9 Cr from INR 1,702 Cr.

Where CRED Garage Fits

Last week, the startup launched CRED garage where users can add vehicles and get access to perks such as concierge service, reminders, document management, vehicle insurance claims, FASTag support and insights on spending on fuel and other vehicle needs.

It will definitely bring a lot of users to CRED. The company might have found it hard to take users away from UPI market leaders, so it’s going after areas that these rivals are not focussing on, as per fintech analysts.

For years many have wondered about CRED’s long-term plans, and it would seem the picture is becoming clearer now. And perhaps, it’s CRED’s time to finally shine.

Read the full article on Inc42.