Aishwarya Ramesh

“In the future, our products will offer personal loans - powered by banks” - Cred founder, Kunal Shah

It’s been four months since a print ad in the Times of India created a splash with afaqs! readers. It was about an app that rewards a user for paying credit card bills. Readers were curious to know more.

Cred's full page ad on Times of India
Cred's full page ad on Times of India

We had the chance to catch up with Kunal Shah, founder of Cred over phone. Shah’s name might sound familiar because Cred is not the first start-up he has backed. Shah was one of the founders of online mobile recharge platform FreeCharge – an immensely successful platform that Axis Bank acquired from its parent company Snapdeal for Rs. 385 crore. Shah has had a whirlwind career, donning many hats – as an investor (in companies like Mobile Premier League, Go-Jek and Razorpay), advisor (to the Bennett Coleman board and AngelList), and now as a start-up founder again, with Cred.

Shah has a single-minded pursuit of scale. It hardly comes as a surprise when he mentions it at least three times in the course of our conversation. “When you try to scale a company within a short period of time, you tend to go through many challenges. It’s a painful phase when you are trying to get everything to work at that scale. We have become a pretty large company since our launch. So, scaling issues, scaling team issues, expecting more from people, expecting partnerships to scale, promising more rewards… almost everything feels challenging at this point in time. That’s why we are working really hard towards scaling right now,” he tells us over the phone.

Cred’s team is based out of Bengaluru and in little over a year, the company is over 100-employee strong – including ex-FreeCharge employees who were keen to work with Shah. “We were just stabilising our system and trying to scale the team, but you can expect plenty of advertisements coming up in the next few months,” he promises.

Cred's full page ad in TOI
Cred's full page ad in TOI

The company is on the lookout for a creative agency and is in talks with a few partners to finalise the process. In terms of advertising, Cred is yet to make a foray into mass media and all its ad spends so far haves been on the digital medium, in addition to running referral programs as a way of gaining visibility. Cred measures the return on investment on these spends in the ‘usual’ way – measuring customer acquisition cost, accounting for the quality of the customer acquired and so on.

We quizzed Shah to know more the basis on which Cred chooses brands to partner with. “We do a lot of curation and the objective is to ensure that we choose brands that are going to exist in the aspirational zone for customers. The objective of curation is to pick brands that are more likely to be accepted and liked when they are newly introduced on the platform,” he states.

Some of the brands that Cred works with
Some of the brands that Cred works with

So, what’s in store for the brand partners? “The brand partners, especially a lot of new brands, have the opportunity to acquire high-quality customers which they may not always have access to. The cost of reaching out on social media can be pretty prohibitive for these brands. If they launch with us, they can get tens of thousands of customers easily, without having to burn a lot of money on social media,” Shah answers.

“The goal for these brands is usually to engage customers through trials or to unlock a new audience segment, in say, a new city. But mostly, it’s to increase their reach,” he explains.

He also stresses on the fact that 90 per cent of the brands listed on the app are Indian brands. “We do not differentiate between international and Indian brands. When we choose a brand partner, we look for a brand that is more likely to be liked by people, the decision is not based on where the brand is born,” he says.

He emphasises on creating experiences on social media and for customers. Many have reached out thanking Shah and Cred for their approach.

The concept of offering rewards becomes rather one-dimensional, Shah believes, and Cred wants to design the reward system beyond just cashback and incentives. Shah mentions that his company was trying to create awareness about brands and products, keeping things fresh with events and occasional contests.

And how does Cred benefit? Shah mentions during the conversation that the brands pay the company a certain amount to list their products and services on the app but what really caught our attention was a plan that he had for the future. “In the future, we will be creating products that will offer personal loans – and these will be powered by the banks. These products will result in monetisation for us,” he offers. They are already in talks with four to five different banks in order to make this service available on the platform.

Most marketers these days would pay a premium price to get a millennial's attention, but that doesn’t necessarily seem to be the case with Cred’s TG. “Most of the customers we cater to are in the age group of 25-30 or so. I’m not sure if I can label them as millennials, but this is the age bracket that we are focussing on,” he says, adding that it is this group that will be the growth driver in the next six months and help them scale.

Shah’s core philosophy for running a business places the customer at the heart of the process. He believes that a company needs to really look out for their customers to build a loyal base. In this context, he mentions that for companies in the Fintech space, the system of using incentives to build a customer base is less likely to be effective. “A lot of our customers love the concept of being able to manage multiple cards at one place and not miss a due date. Often, that’s a much bigger driver than just the incentives,” he tells us, emphasising on the utility value that Cred has.

“If you can get your earliest set of customers to love and recommend you, I think you’re in a good place. Many times, people forget that nothing is more powerful than word of mouth. As long as we focus on doing that, every company can do well,” he tells us.

But building a company comes at a price. Shah tells us that start-up journeys are much more intense than an investor or employee role. “Start-ups are all-consuming, it is extremely hard to focus on other things when you’re trying to build one. Any free time you have, you are trying to meet new people and do new things. The goals of the company become your own goals and it becomes extremely hard to switch off. For example, it’s near impossible to take a weekend off because that’s the time I spend interviewing people. We’re constantly evaluating and seeing what new things we can do with the product and so on,” Shah tells us.

A defining moment for Shah in his career was when he started to give back to the start-up ecosystem. “I often invest in a lot of new founders and seeing them do well and witnessing the entire system evolve is the biggest joy for me,” he says.

Three key learnings from his career:

1. In today’s world, the speed of execution matters more than ever.

2. It’s impossible to create start-up success without an adequate amount of research before jumping in.

3. India is a unique place – the entire world is focussing on helping us grow our start-up ecosystem. From foreign investors to foreign strategic companies, everybody is here. I don’t think we can have a better opportunity than this time to build a company.

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