Kunal Shah’s Cred spent Rs 64 Cr in FY19 with zero operating revenue


Credit card payments app Cred has been creating buzz ever since it launched in November 2018. The Kunal Shah-led startup raised one of the largest Series A rounds ever by an Indian startup. 

While the company was only operational for five months in FY19, it had a negative operating cash flow of Rs 117.84 crore during the first fiscal year of its operations.

Yes, you read it right. About Rs 118 crore is the cash outflow one needs to develop a niche product for wealthy credit card spenders in India. According to regulatory filings, Cred has recorded zero revenue from its operations with an overall burn of Rs 64 crore in the fiscal year 2018-19. 

The only respite was the Rs 3.03 crore it generated in interest on deposits. 

Cred is a credit card payment platform which lets cardholders pay their credit card bill through the app and get a bouquet of benefits via Cred coins. The virtual coins can be redeemed across coffee shops, movie theatres, e-commerce shopping and curated experience workshops, among others.

As of now, Cred doesn’t have any visible business model. According to Entrackr sources, the company will explore monetisation by charging brands for running promotions on Cred. The other monetisation channels could be lending. However, it could only be evangelised several years from now.

Tracking the expenditure pattern of the firm, the high customer acquisition cost is quite evident in the expense sheet for the year-old firm. Marketing and communication expenditure of Rs 21.3 crore accounted for nearly 33% of the firm’s total expenses incurred in FY19. 


Around Rs 4.8 crore was spent on specialised consultancy to address the issue at hand: creating demand for a product which had minimal immediate demand in the market. 

At Rs 17.02 crore, employee benefits expense was the second biggest component in the overall burn, as the company handed out Rs 15.3 crore in salaries and another Rs 1 crore on staff welfare. 

The spend on IT & Software was around Rs 6.24 crore, less than 10% of the total cash burn the company spent on developing its purely app-based platform. Additionally, miscellaneous expenses included unexplained “Direct Costs” amounting to Rs 10.75 crore in the expense sheet which pushed the total expenditure for the Bengaluru-based firm to Rs 63.9 crore during FY19.

Ultimately, Cred had a net loss of Rs 60.86 crore in FY19.


The company fueled these expenses by issuing shares worth Rs 178.64 crore during FY19 and its total assets at the end of the year stood at Rs 161.41 crore. Interestingly 83.2% or Rs 161.4 crore of these assets are parked with settlement wallets & payment gateways.

The brainchild of Shah, Cred had raised $120 million Series B round led by Ribbit Capital and Gemini Investments. Tiger Global and Chinese private equity firm Hillhouse also participated in the round. Before this, it had also raised a $30 million Series A round led by Sequoia Capital.

While there is no parallel of Cred in India, it looks similar to Credit 51 that emerged as a successful personal financial service for personal credit management in China. It’s a Unicorn and listed company on the Hong Kong Stock Exchange.

Looking at the figures, one can say that the financial performance of Cred in FY19 hasn’t been impressive. But, it’s worth noting that such businesses are required to absorb hundreds of millions of USD before churning any sizable revenue. 

Given that the company has been spending aggressively on marketing and promotion in ongoing fiscal, its burn and losses are bound to increase multi-fold in FY20.

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