Fintech unicorn CRED’s founder and CEO Kunal Shah said there is more stability and clarity emerging on the regulatory front in India, days after the Ministry of Electronics and Technology blocked numerous loan and betting apps over alleged Chinese links.
“We are at a stage where one has to be more complaint, there are a lot of clear regulations that exist and as we become more compliant, this (move to ban apps) will come down. I don’t foresee this continuing,” Shah said in a conversation with select reporters in Bengaluru earlier this week.
As it happens, PhonePe founder and CEO Sameer Nigam too backed the Government’s move, highlighting money laundering concerns swirling around gambling apps.
Founded a little over four years ago, CRED started out as a credit card and bill payments app that rewards users for good financial behaviour. It made a conscious choice to focus on the top 30-40 million households in India. It has since expanded its offerings to include lending and commerce, and currently offers products such as CRED RentPay,CRED Cash, CRED Pay, CRED Store, and CRED Travel Store.
“The first chapter was about building the community and brand. It is very hard to build trust in financial services unless you build a brand. We are creating a platform for multiple products”, Shah said adding that the monetisation journey so far has been promising.
“We earn revenues from multiple products like payments, e-commerce, and lending and they all continue to a healthy mix of revenues…We don’t have a winner, all of the products are contributing to our revenues,” Shah said.
The company said that leveraging growing member engagement & product maturity for monetisation will be the focus going ahead. It currently has over 11.2 million members.
“The journey of monetisation has been great. We grew monetisation by 4.4 X in 2022 and we see a good response for our products. We are seeing meaningfully large revenue opportunities for each of our products,” added Shah.
CRED is also seeing strong growth through cross-selling.
“The core product is bill payments and on bill payments, the core use is utility and rewards, we don’t make money out of it but a customer ends up using other products through one product, and that’s how we get engagement,” Shah said. While he did not give specifics, he said cross-sell percentages are seeing very healthy growth.
While CRED posted a total income of Rs 422 crore in FY22 compared to Rs 95 crore in the previous fiscal, its losses during this period came in at Rs 1279 crore compared to Rs 524 crore in the previous fiscal. It raised $80 million as a part of its Series F funding round led by Singapore’s sovereign wealth fund GIC at a valuation of $6.22 billion in June last year.
“We have always been well capitalised and have multiple years of runway. Losses are not a challenge as monetisation has kicked in,” Shah said.
In 2023, the company will focus on increasing its revenue per employee and building a talent pipeline.
Talking about the current macroeconomic situation and startup funding freeze, Shah said that the company is well-placed and has its investors support.
“We have seen strong support from our investors, with every fundraise we barely diluted the company and we chose to grow in a certain way…Even now if we wanted to raise capital and there is strong support for that,” Shah said.
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