CRED is one of the most talked-about startups in India, especially among credit card users. It offers cashback, exclusive offers, and a premium app experience. But even with such popularity, CRED has been reporting huge losses. So why is that happening?
Kunal Shah, the founder of CRED, is building a business that focuses on trust and long-term value, not quick profits. The company is heavily investing in branding and customer loyalty rather than making money right away.
One major reason for the losses is the high marketing spend. CRED runs massive campaigns during IPL, partners with celebrities, and offers generous cashback and rewards. All of this creates a strong brand image but doesn’t generate direct revenue.
Another key factor is that most of CRED’s services are free for users. You can pay your credit card bills, earn CRED coins, and redeem offers without spending a single rupee. That means user engagement is high, but earnings are still low.
However, CRED is slowly building revenue streams like CRED Cash (personal loans), CRED Mint (peer-to-peer lending), and RentPay. These are designed to earn money in the long run, but they are still developing.
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Kunal Shah believes in long-term thinking. He is building a trusted user base of people with good credit scores, and plans to introduce premium financial services for them in the future. It’s a classic case of “spend now, earn later.”
Many successful startups like Amazon, Flipkart, and Paytm also faced losses in their early years. They focused on growth and user trust first – just like CRED is doing today.
Conclusion:
CRED’s losses are not a sign of failure but a part of its growth strategy. Kunal Shah is playing the long game, and if the plan works, today’s losses could turn into tomorrow’s success.
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