For Cred, revenue growth and curbing losses will be the focus: Kunal Shah

The remarks come at a time when the company’s losses have widened to Rs 1,279 crore in fiscal year 2021-2022 (FY22), from Rs 524 crore losses in FY21. Revenue, on the other hand, has grown more than four-fold to Rs 422 crore in FY22 from Rs 95 crore in FY21.

“The investment we have made in building our brand, community and products has been a conscious choice, and we have not deviated from that plan. Revenue growth and bringing down losses is going to be a norm going forward, not just because this year we have to do that. We are well positioned because of the choice we made of going after a certain customer segment and the monetisation avenues we are focussing on,” Shah said in a face-to-face interaction with ET.

The Bengaluru-based fintech platform has in the past been criticised for not showing active revenue streams and mounting losses.

“The community is working out and the platform is playing out on both sides with the network of merchants and BFSI partners. Members are engaged in multiple products. And the monetization is kind of setting us in the right direction,” Shah said.

Consumer growth

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By December, Cred had almost 16 million customers on its platform. This was a growth from 11.2 million customers by March-end last year, and 7.5 million customers by March 2021.

On whether Cred has tapped into most of its target user base of the top 25-30 million credit worthy customers, Shah said, “We’ve chosen to go after 35-40 million households. In terms of the base, probably there are more (consumers) to go. The base of credit-worthy individuals is also growing rapidly.”

Cred previously saw consumers coming for one product offering; however, now less than 60% of the platform’s new consumers seek just one product offering, he said.

At present Cred’s offerings include credit product, Cash; credit-card usage for payment of rents and education fees; Max; unified payments interface (UPI) product, Pay; peer-to-peer lending offering, Mint; holiday deals platform, Travel; and curated ecommerce play, Store.

On how many customers were engaging in more than one Cred product, Shah said the platform was seeing ‘healthy cross-sell percentages’. He did not divulge specifics.

“We are consciously not cross-selling many products early on because we are also trying to slowly ramp up the products,” he added.

Runway and fundraising
Cred, which has been on a fundraising spree over the past few years, had seen valuation grow almost three-fold to $6.4 billion by June 2022, less than 15 months after entering India’s unicorn club, or privately held companies with valuations of $1 billion or more.

It last raised Rs 617 crore (about $80 million) in June last year.

“Our burn meaningfully doesn’t shrink our runway. We have been fortunate to have strong investors backing us, while other startups have struggled. We have barely diluted the company in the past 3-4 fundraises,” Shah said, on its cash runway.

The company has been in talks to acquire investment platform Smallcase. However, the talks fell through due to valuation differences, sources told ET.

It has also applied for a payment aggregator (PA) licence, but has not received the Reserve Bank of India’s nod yet.

“We have never applied for an account aggregator licence,” Shah said. “We are in conversation with RBI on our PA and PG licence and don’t see any major challenge to that,” he said.

Ecommerce play
ET exclusively reported on December 17 that Cred had shut its group-buying business. The company has been running several pilots such as video commerce for its ecommerce platform, Store, over the past months.

“We made two choices for our commerce business. Can we create an experience which is not based on selection rather curation? An example of that is Cred not having a search bar. Second is whether we can create the most frictionless experience. Also, we don’t take any seller commission because we are interested in the engagement it (brands and products) can create,” said Shah.

The company will continue to run experiments for its ecommerce vertical, he added.

“We are still ramping up our ecommerce journey and we are bullish on it. We will continue to do more experiments. Our core thesis though will continue.”