CRED is an India-based none-month-old startup. It aims to build a solution to incentivize credit card users across India to be more responsible with their money. In the long run, the startup wants to help the users to improve their credit score. CRED raises $120 million in recent Series B financing round.
With the recent funding, the startup has raised about $145 million. Thus, it is now valued between $430 million to $450 million.
Hundreds of millions of Indians today have never taken a loan from a recognized entity nor owned a credit card. Thus, do not have a credit score. Meanwhile, according to the government’s official figures, fewer than 50 million credit cards are in circulation in India currently. From that number, the industry report shows that half of them are unique credit card users.
Money management education is not something common in India. Therefore, there is a huge trust gap in the region. Unlike in developed markets where there is a high systematic trust among people, in India people always rely on a third party for their transaction. The example of the transaction can be as simple as renting a flat.
CRED offers a range of features to solve the problem. Its features include the ability to better track their spending, get reminders, and check their credit score. Above all, it also allows the users to access a range of lofty offers. The offers include membership to a gym at a discounted price, access to good restaurants at low prices and subscription to various services at little to no charge.
To access these features, users have to earn points. Meanwhile, to get the points, they have to pay their credit card bills on time.
Moreover, CRED does not charge users any money for joining its platform, nor for availing any of the features it offers. But it is generating revenue from some of the partners that are supplying offers on the app.