Bengaluru-based Cred has been evolving to allow users book vacations, pay utility bills, shop on the app and much more. Kunal Shah, founder of the four-year-old fintech firm, tells FE’s Tushar Goenka that the company isn’t worried about turning profitable yet, and will continue to focus on building the brand and its member base, along with increasing its offerings, in the near future.
What is FY23 looking like, especially on the growth vs profitability front, at a time when investors are coming down heavily on portfolio companies?
We are not thinking about profitability now. One can choose to go about balancing growth and profit, and we’ll take those calls appropriately. We’ve so far been executing on the plan and have not seen any special change of direction coming from investors. I don’t think investors are coming heavy on anything. They have always been about building enduring businesses, building businesses that can have a large revenue scale and moats, good brand and talent. But should the company be profitable? The answer is yes.
FY22 was the second year in your monetisation journey, what are the levers that are working for Cred?
I wish there was just one, but because of the kind of customers we’ve chosen, all of them are working. Our monetisation tools include cross-selling of financial services, merchant products, e-commerce payments, including things like house rent, all working well. I don’t think we have a winner and that’s also what is giving our investors the confidence. We are not a one-line business, we have multiple lines kicking in for us. The adoption of members to do different products, or cross-sell, has been pretty strong for Cred.
The company leveraged Cred coins as a hook to acquire new members onto the platform but the excitement around that seems to be fading now. Can you explain if anything has changed?
It is not fading. I think a lot of times we kind of look at data from a few people and extrapolate that. But I can tell you with confidence that the engagement and traffic to merchants, because of Cred coins which also helps us cross-sell products, have been very strong. Over 90% of our members redeem at least one reward on the app every month and that number is growing. It was always a gaming currency to drive engagement but people confuse it with credit card points — it was never supposed to like that.
How is Cred store doing for you?
We made a conscious choice to not go for selection and instead opt for curation, where you search for what you exactly need. When you’re just scrolling, you don’t go with the intent of buying. We don’t want to build a full-blown platform, we will take it slowly. But the brands we work with have told us that we are almost the same size as any other platform for them. For brands that list on multiple platforms, they’ve seen that the product return rate is 10X lower on Cred. So, the quality of customers matters.
